Documents Bonthuis, Boele 2 results

"This paper estimates wage equations to test for changes in the responsiveness of wages to unemployment using panel estimates which pool the data across the euro area countries. More specifically, we investigate whether the sensitivity of euro area wages to movements in unemployment is different during downturns (i.e., downward wage rigidity), whether it has changed during the crisis and which institutional features might be driving the results. We find evidence of a lower responsiveness of wages to unemployment during downturns, consistent with the stylised facts that euro area wages are rigid downwards. We also find that the degree of downward wage rigidity has declined as the crisis became more prolonged. Overall, it seems that much of the downward wage rigidity reflects institutional factors, such as a high degree of union coverage and employment protection. Additionally, a rising share of the long-term unemployed lowers the responsiveness of wages to unemployment while a rising share of temporary labour seems to dampen wage growth."

"This paper studies unemployment and vacancy developments in the euro area at the aggregate and country level over the Great Recession. The recent crisis has had a heterogeneous impact on euro area labour markets, leading to significant employment losses, especially in some sectors. The extent to which the rise in unemployment and particularly long-term unemployment reflects growing mismatch across euro area labour markets is one of the biggest questions facing euro area labour market policy makers. This paper attempts to shed light on this question by analysing developments in euro area Beveridge curves over the past 20 years, at both the aggregate level and on a disaggregated basis for all euro area countries. Using a simple model of Beveridge curve developments, we test for statistical significance of observed developments and find a significant shift in the euro area Beveridge curve since the onset of the crisis, but considerable heterogeneity at the country level. At the extremes, country level differences include a significant outward shift in the Beveridge curve for Spain and France, an inward shift for Germany, while some euro area countries reveal no significant changes in the responsiveness of unemployment to vacancy developments over the course of the crisis. We include an examination of factors underlying the observed developments across the countries."