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Javier Ordóñez - One of the best experts on this subject based on the ideXlab platform.
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Unit Labour Costs and the dynamics of output and unemployment in the southern European crisis countries
Empirica, 2019Co-Authors: Juan Carlos Cuestas, Javier Ordóñez, Karsten StaehrAbstract:The GIPS countries, the southern European crisis countries, have seen depressed output dynamics and high unemployment rates during the great recession following the 2007–2008 financial crisis. This paper considers the effects of measures that seek to improve competitiveness by reducing real unit Labour Costs. The results are derived in structural vector autoregressive models for each of the GIPS counties as well as two reference countries, Germany and the Netherlands. The responses of output and unemployment to innovations in real unit Labour Costs are economically and statistically significant for Germany and the Netherlands, whereas the responses are typically muted and imprecise estimated for the GIPS countries. The small and uncertain effects raise doubts regarding the efficacy of measures that seek to lower real unit Labour Costs in the GIPS countries.
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Unit Labour Costs and the Dynamics of Output and Unemployment in the Southern European Crisis Countries
2018Co-Authors: Juan Carlos Cuestas, Karsten Staehr, Javier OrdóñezAbstract:The GIPS countries, the Southern European crisis countries, have seen depressed output dynamics and high unemployment since the outbreak of the global financial crisis. This paper considers the effects of measures that seek to improve competitiveness by reducing real unit Labour Costs. The results are derived in structural vector autoregressive models for each of the GIPS counties, and for the reference countries Germany and the Netherlands. The responses of output and unemployment to innovations in real unit Labour Costs are economically and statistically significant for Germany and the Netherlands, whereas the responses are typically small and imprecise estimated for the GIPS countries. The small and uncertain effects raise doubts regarding the efficacy of measures that seek to lower real unit Labour Costs in the GIPS countries.
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Real unit Labour Costs in Eurozone countries: Drivers and clusters
IZA Journal of European Labor Studies, 2015Co-Authors: Javier Ordóñez, Hector Sala, José I. SilvaAbstract:We examine the trajectories of the real unit Labour Costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components —real wages, capital intensity, and technology— are uncovered through decomposition and cluster analyses. In the last three decades, the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) succeeded in reducing their RULCs by more than their northern partners. With the exception of Ireland, however, technological progress was weak; it was through capital intensification that periphery economies gained efficiency and competitiveness. Cluster heterogeneity, and lack of robustness in cluster composition, is a reflection of the difficulties in achieving real convergence and, by extension, nominal convergence. We conclude by outlining technology as the key convergence factor, and call for a renewed attention to real convergence indicators to strengthen the process of European integration.
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Real unit Labour Costs in Eurozone countries: drivers and clusters
IZA Journal of European Labor Studies, 2015Co-Authors: Javier Ordóñez, Hector Sala, José I. SilvaAbstract:We examine the trajectories of the real unit Labour Costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components—real wages, capital intensity, and technology—are uncovered through decomposition and cluster analyses. In the last three decades, the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) succeeded in reducing their RULCs by more than their northern partners. With the exception of Ireland, however, technological progress was weak; it was through capital intensification that periphery economies gained efficiency and competitiveness. Cluster heterogeneity, and lack of robustness in cluster composition, is a reflection of the difficulties in achieving real convergence and, by extension, nominal convergence. We conclude by outlining technology as the key convergence factor, and call for a wider strategy in Labour market policies, which should be more oriented to promote the sources of productivity growth. JEL Classification numbers F43; F62; O47; O52
José I. Silva - One of the best experts on this subject based on the ideXlab platform.
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Real unit Labour Costs in Eurozone countries: Drivers and clusters
IZA Journal of European Labor Studies, 2015Co-Authors: Javier Ordóñez, Hector Sala, José I. SilvaAbstract:We examine the trajectories of the real unit Labour Costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components —real wages, capital intensity, and technology— are uncovered through decomposition and cluster analyses. In the last three decades, the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) succeeded in reducing their RULCs by more than their northern partners. With the exception of Ireland, however, technological progress was weak; it was through capital intensification that periphery economies gained efficiency and competitiveness. Cluster heterogeneity, and lack of robustness in cluster composition, is a reflection of the difficulties in achieving real convergence and, by extension, nominal convergence. We conclude by outlining technology as the key convergence factor, and call for a renewed attention to real convergence indicators to strengthen the process of European integration.
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Real unit Labour Costs in Eurozone countries: drivers and clusters
IZA Journal of European Labor Studies, 2015Co-Authors: Javier Ordóñez, Hector Sala, José I. SilvaAbstract:We examine the trajectories of the real unit Labour Costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components—real wages, capital intensity, and technology—are uncovered through decomposition and cluster analyses. In the last three decades, the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) succeeded in reducing their RULCs by more than their northern partners. With the exception of Ireland, however, technological progress was weak; it was through capital intensification that periphery economies gained efficiency and competitiveness. Cluster heterogeneity, and lack of robustness in cluster composition, is a reflection of the difficulties in achieving real convergence and, by extension, nominal convergence. We conclude by outlining technology as the key convergence factor, and call for a wider strategy in Labour market policies, which should be more oriented to promote the sources of productivity growth. JEL Classification numbers F43; F62; O47; O52
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Wage effects of non-wage Labour Costs
European Economic Review, 2014Co-Authors: María Cervini-plá, Xavier Ramos, José I. SilvaAbstract:We study short- and long-term wage effects of two important elements of non-wage Labour Costs: firing Costs and payroll taxes. We exploit a reform that introduced substantial reduction in these two provisions for unemployed workers aged less than thirty and over forty five years. Theoretical insights are gained with a matching model with heterogeneous workers, which predicts an ambiguous effect on wages: firing Costs are expected to increase wages, because they increase the bargaining power of workers, while the effect of payroll taxes is negative. Difference-in-differences estimates, which account for the endogeneity of the treatment status, suggest that decreased firing Costs and payroll taxes have a positive overall short-term effect on wages – and also on unemployment. We find larger effects for older than for younger workers and for men than for women. Calibration and simulation of the model shows that about fifty percent of the predicted cumulative increase on wages takes place during the first year of the reform. Our simulations also show that the increase in wages is mostly due to the reduction in payroll taxes, while the overall effect of firing Costs is nil because direct and indirect effects of firing Costs offset each other.
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Wage effects of non-wage Labour Costs
2011Co-Authors: María Cervini, Xavier Ramos, José I. SilvaAbstract:We study wage effects of two important elements of non-wage Labour Costs: firing Costs and payroll taxes. We exploit a reform that introduced substantial reduction in these two provisions for unemployed workers aged less than thirty and over forty five years. Theoretical insights are gained with a matching model with heterogeneous workers, which predict a positive effect on wages for new entrant workers but an ambiguous effect for incumbent workers. Difference-in-differences estimates, which account for the endogeneity of the treatment status, are consistent with our model predictions and suggest that decreased firing Costs and payroll taxes have a positive effect on wages of new entrants. We find larger effects for older than for younger workers and for men than for women. Calibration and simulation of the model corroborate such positive effect for new entrants and also show a positive wage effect for incumbents. The reduction in firing Costs accounts, on average, for one third of the overall wage increase.
Alois Guger - One of the best experts on this subject based on the ideXlab platform.
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International Ranking on Unit Labour Costs Unchanged in 2005
2006Co-Authors: Alois GugerAbstract:In 2005, unit Labour Costs in Austrian manufacturing decreased by 0.7 percent but their relative ranking compared to the average of its trading partners in a single currency remained unchanged (+1 percent). Austria's overall competitive position continued to improve in this decade, in 2005 by 1 percent.
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Austria's International Ranking of Unit Labour Costs Remained Unchanged in 2001
2002Co-Authors: Alois GugerAbstract:Austria currently takes 11th place in an international ranking of unit Labour Costs. Labour is most expensive in Norway, Germany and Switzerland, where one hour of manufacturing Labour Costs almost a quarter more than in Austria. In Austrian manufacturing, one hour of work cost € 20.31 in 2001, which was about 4 percent higher than the EU average. The amount was composed of wages costing € 10.65 and non-wage Labour Costs of € 9.66. With this, non-wage Labour Costs made up 90.7 percent. In spite of a cut in the contribution by employers to the health insurance scheme for blue-colour workers, it was 0.8 percentage points higher than in 2000, since severance payments, after declining substantially in 2000, were once again on the rise. Non-wage Labour Costs in Austria are high because a large portion of the annual income is in the form of tax-privileged bonus payments (13th and 14th monthly salaries). If these bonus payments were counted as fixed parts of the wage or salary, non-wage Labour Costs would make up 63.2 percent for manufacturing. Austria's ranking in terms of unit Labour Costs changed several times over the course of the 1990s. In the first half of the decade, Austrian industries lost ground due to considerable wage inflation and the schilling's upward revaluation due to the crisis in the European monetary system. After the mid-1990s, a better currency situation and lower wage inflation, with sustained high rates of productivity growth, markedly improved price competition: relative unit Labour Costs have since been declining on a uniform currency base against the average of trade partners, by well over 2.5 percent p.a. Altogether, Austrian manufacturing has been able to improve its unit wage Costs position by a good 10 percent since the early 1990s. In 2001, the cost of an hour of work rose by 3.5 percent; with productivity growth declining to +1.3 percent (as against +7.3 percent in 2000), unit wage Costs in Austrian manufacturing went up by 2.1 percent. With unit wage Costs rising similarly in competing countries, Austria's relative ranking remained unchanged over the previous year.
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Slight Rise in the Manufacturing Industry's Relative Unit Labour Costs in 1998
1999Co-Authors: Alois GugerAbstract:Austria ranks ninth in the international hierarchy of Labour Costs. Labour is most expensive in Germany, even when including Eastern Germany – one working hour in German manufacturing Costs 27 percent more than in Austria (+21 percent in Switzerland). The U.S. and French manufacturing industries pay about 10 percent less; the rate is lower by some 15 percent in Italy, Japan and the U.K. WIFO previously analysed the competitive standing of Austria's economy on the basis of Labour cost and productivity data obtained from the Austrian industry. As a consequence of statistics being harmonised with the EU system, data from the SME sector are now available as well. In order to facilitate comparison with other countries, WIFO has included SME data in its analysis which now comprises the entire manufacturing sector. Based on the new method, i.e., including SME data, the cost of one working hour in manufacturing is lower by 8 percent than in industry, amounting to ATS 256.80 in 1998. Of this, ATS 135.00 was paid in direct compensation for work, and ATS 122.00 were non-wage Labour Costs, so that non-wage Labour Costs amounted to 90.4 percent in manufacturing. Austrian businesses have found their price-driven competitive position to change repeatedly over the 1990s. In the first half of the decade, the Labour cost position of Austrian industry deteriorated by almost 3 percent mainly as a consequence of the gain of the schilling in the train of the EMS crisis; but relative unit Labour Costs then declined in 1996 and 1997 as a result of substantial gains in productivity and the recovery of some major euro currencies by 5 percent. In 1998, Austrian manufacturing was once again faced with a dent in its Labour cost position. Relative unit Labour Costs rose by 0.4 percent over the average of its trading partners and the EU, and by 1.4 percent vis-a-vis Germany. The main cause was the modest pace of productivity growth in Austria: employment responded tardily to the upswing of 1997, so that manufacturing jobs still grew by about 1 percent in 1998 even though the recovery slowed down and production growth was checked in the wake of the crisis in South-East Asia.
Karsten Staehr - One of the best experts on this subject based on the ideXlab platform.
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Unit Labour Costs and the dynamics of output and unemployment in the southern European crisis countries
Empirica, 2019Co-Authors: Juan Carlos Cuestas, Javier Ordóñez, Karsten StaehrAbstract:The GIPS countries, the southern European crisis countries, have seen depressed output dynamics and high unemployment rates during the great recession following the 2007–2008 financial crisis. This paper considers the effects of measures that seek to improve competitiveness by reducing real unit Labour Costs. The results are derived in structural vector autoregressive models for each of the GIPS counties as well as two reference countries, Germany and the Netherlands. The responses of output and unemployment to innovations in real unit Labour Costs are economically and statistically significant for Germany and the Netherlands, whereas the responses are typically muted and imprecise estimated for the GIPS countries. The small and uncertain effects raise doubts regarding the efficacy of measures that seek to lower real unit Labour Costs in the GIPS countries.
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Unit Labour Costs and the Dynamics of Output and Unemployment in the Southern European Crisis Countries
2018Co-Authors: Juan Carlos Cuestas, Karsten Staehr, Javier OrdóñezAbstract:The GIPS countries, the Southern European crisis countries, have seen depressed output dynamics and high unemployment since the outbreak of the global financial crisis. This paper considers the effects of measures that seek to improve competitiveness by reducing real unit Labour Costs. The results are derived in structural vector autoregressive models for each of the GIPS counties, and for the reference countries Germany and the Netherlands. The responses of output and unemployment to innovations in real unit Labour Costs are economically and statistically significant for Germany and the Netherlands, whereas the responses are typically small and imprecise estimated for the GIPS countries. The small and uncertain effects raise doubts regarding the efficacy of measures that seek to lower real unit Labour Costs in the GIPS countries.
Juan Carlos Cuestas - One of the best experts on this subject based on the ideXlab platform.
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Unit Labour Costs and the dynamics of output and unemployment in the southern European crisis countries
Empirica, 2019Co-Authors: Juan Carlos Cuestas, Javier Ordóñez, Karsten StaehrAbstract:The GIPS countries, the southern European crisis countries, have seen depressed output dynamics and high unemployment rates during the great recession following the 2007–2008 financial crisis. This paper considers the effects of measures that seek to improve competitiveness by reducing real unit Labour Costs. The results are derived in structural vector autoregressive models for each of the GIPS counties as well as two reference countries, Germany and the Netherlands. The responses of output and unemployment to innovations in real unit Labour Costs are economically and statistically significant for Germany and the Netherlands, whereas the responses are typically muted and imprecise estimated for the GIPS countries. The small and uncertain effects raise doubts regarding the efficacy of measures that seek to lower real unit Labour Costs in the GIPS countries.
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Unit Labour Costs and the Dynamics of Output and Unemployment in the Southern European Crisis Countries
2018Co-Authors: Juan Carlos Cuestas, Karsten Staehr, Javier OrdóñezAbstract:The GIPS countries, the Southern European crisis countries, have seen depressed output dynamics and high unemployment since the outbreak of the global financial crisis. This paper considers the effects of measures that seek to improve competitiveness by reducing real unit Labour Costs. The results are derived in structural vector autoregressive models for each of the GIPS counties, and for the reference countries Germany and the Netherlands. The responses of output and unemployment to innovations in real unit Labour Costs are economically and statistically significant for Germany and the Netherlands, whereas the responses are typically small and imprecise estimated for the GIPS countries. The small and uncertain effects raise doubts regarding the efficacy of measures that seek to lower real unit Labour Costs in the GIPS countries.
