Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153582
Authors: 
Pérez, Javier J.
Sánchez, Jesús
Year of Publication: 
2010
Series/Report no.: 
ECB Working Paper 1148
Abstract: 
Do public sector wages exert pressures on private sector wages, or has the private sector a leadership role in wage setting? This paper tries to isolate the pure signalling effect that one sector might exert on the other by controlling for other determinants of wages (prices, productivity, institutions) for the main euro area economies (Germany, France, Italy and Spain) and the periods 1980-2007 and 1991-2007. It exploits available quarterly information not yet used in the literature, and combines different data sources in the framework of mixed-frequencies time series models. The quarterly frequency of our data allows us to check the existence of purely intra-annual links between public and private sector wages (signalling effect). There is strong evidence of public wages’ leadership, either in conjunction with bi-directional links from the private sector (Germany and Spain) or pure public wage leadership (France in the sample 1991-2007, Italy for within-the-year linkages).
Subjects: 
causal graph
causality
government wages
Mixed frequency data
private sector wages
signalling
JEL: 
C32
C53
J30
J51
J52
E62
E63
H50
H6
Document Type: 
Working Paper

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