2007
DOI: 10.1111/j.1467-6435.2007.00379.x
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Stimulating Employment Growth with Higher Wages? A New Approach to Addressing an Old Controversy

Abstract: We analyse the impact of wages on employment growth in West German local industries (1993-2002), addressing the tension between cost and potentially offsetting demand side effects. We construct a neutralised regional wage level that is detached from various productivity influences. A positive value implies 'overly high' labour costs, but also high local purchasing power. A subsequent employment growth regression yields significantly negative effects associated with this indicator. Cost push effects dominate, b… Show more

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Cited by 10 publications
(6 citation statements)
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“…In contrast to the findings of Suedekum and Blien (2007), no significant influence of the wage of nearby regions on the employment development of the observed region occurs. Suedekum and Blien (2007) discover a positive relationship between the wage of nearby regions and employment development in the observed region, pointing to the dominance of migration of firms.…”
Section: Adjusted Wage Growthcontrasting
confidence: 54%
See 2 more Smart Citations
“…In contrast to the findings of Suedekum and Blien (2007), no significant influence of the wage of nearby regions on the employment development of the observed region occurs. Suedekum and Blien (2007) discover a positive relationship between the wage of nearby regions and employment development in the observed region, pointing to the dominance of migration of firms.…”
Section: Adjusted Wage Growthcontrasting
confidence: 54%
“…Suedekum and Blien (2007) discover a positive relationship between the wage of nearby regions and employment development in the observed region, pointing to the dominance of migration of firms. However, the authors only included western Germany while in this paper all German regions are included.…”
Section: Adjusted Wage Growthmentioning
confidence: 99%
See 1 more Smart Citation
“…Selon la théorie néoclassique, les entreprises se (re)localisent là où le niveau de salaire est le plus faible. Cette (re)localisation peut être locale (au sein d'un même pays) ou internationale dans le cas d'une économie ouverte (Suedekum et Blien, 2007). Une main-d'oeuvre moins chère permet aux entreprises de substituer, toutes choses égales par ailleurs, le facteur capital par le facteur travail.…”
Section: Salaireunclassified
“… A similar procedure was applied, for example, by Südekum and Blien (2007) and Südekum et al. (2006).…”
mentioning
confidence: 99%