Labour costs dynamics in the Euro area: some empirical evidence

Abstract

Little is known about how the introduction of a common currency and a single monetary policy has affected the labour cost dynamics in the Euro area. The literature has focused mainly on business cycle synchronisation. This paper analyses labour costs convergence in the Euro area since 1995, combining results from different data and two complementary approaches. First we present some relevant facts about wages and unit labour cost dynamics and, in a second phase, we investigate whether the physical introduction of the euro has changed the volatility and the synchronisation of labour costs cycles, in a context of globalisation. Overall, our results indicate that labour markets in the Euro area are very heterogeneous. However, some signs of labour cost convergence are beginning to emerge. After the circulation of the euro, it seems that a reduction in nominal unit labour costs differences and an increase on the degree of synchronisation has occurred, which has been strengthened in the economic and financial crisis period.

Factors for the Management of Scarce Human Resources and Highly Skilled Employees in IT-Departments

“…2. Geographic Payment Differences: These are differences between purchasing power of two up to n countries, in this research the countries of the European Union (Dao, 2013;Gouveia & Correia, 2013). 3.…”

“…RQ1: What are factors for fundamental wages for high skilled employees in IT-departments? (Grund & Westergaard-Nielsen, 2005), (Peng & Eunni, 2011), (Anger, 2007), (Zhao, 2011), (Dao, 2013;Gouveia & Correia, 2013), (Bessette, 2014) RQ2: What are factors for measures to optimize and educate the employee pool with reference to untapped potential within an organization? (Schmidt & Kunzmann, 2006), (Mehairi & Binning, 2014), (LeRouge, Wiley, & Maertz, 2013), (Crow & Liggett, 2014), (Bykov & Shyshkina, 2014), (Asgrahani & Shankararaman, 2014), (Asgarkhani & Shankararaman, 2014), (Grice, Peer, & Morris, 2011) RQ3: What are factors for measures to support the psychological healthiness of the employees?…”

The price-price Phillips curve in small open economies and monetary unions: theory and empirics

“…This can o¤er guidance to central bankers. For instance, as far as the Euro zone is concerned, it is well known that, in several respects, the members'business cycles have not yet synchronized (Gouveia and Correia, 2013;Caraballo and Efthimiadis, 2012;Koronowski, 2009;Hughes Hallett and Richter, 2008). In these circumstances, our model implies that the ECB executive board should not focus only on Northern countries; it should also carefully consider unemployment developments in Southern ones, as also testi…ed by our empirical results.…”

The European Crisis: Repercussions on the Portuguese Economy

“…6 The slowdown of unit labour costs growth in Portugal was in process before the crisis. For example, Gouveia and Correia (2013), analysing labour costs convergence in the euro area since 1995, concluded that, after the circulation of the euro, Portugal reduced considerably the differential in nominal compensation per employee growth and in nominal unit labour costs growth relative to euro area. levels of inequality in Portugal.…”