scholarly journals Panel Estimation for the Relationship between Real Wage, Inflation and Labor Productivity for OECD Countries

2019 ◽  
Author(s):  
Sevilay Konya ◽  
Zeynep Karaçor ◽  
Mücahide Küçüksucu
Keyword(s):  
Labor Productivity ◽  
Real Wage ◽  
Slovak Republic ◽  
Oecd Countries ◽  
Panel Estimation ◽  
Economic Literature ◽  
Real Wages ◽  
Wage Inflation ◽  
The Relationship ◽  
Cointegration Relationship

There are studies examining the relationship between real wage, inflation and labor productivity in the economic literature. Increase in real wages causes to an increase in labor productivity. On the other hand, productivity increases also induce inflation to fall. Therefore, the aim of this study is to investigate the relationship between real wage, inflation and labor productivity in the 22 OECD countries (Australia, Belgium, Canada, Chile, Czech Republic, France, Greece, Hungary, Japan, Korea, Latvia, Luxembourg, Mexico, Netherlands, New Zealand, Poland, Portugal, Slovak Republic, Slovenia, Spain, Turkey, United States) in the period of 1995-2017 by panel data methods. According to results, the cointegration relationship between real wage, inflation and labor productivity was found. In addition, mutual causality was determined between the variables we discussed.

Can labor productivity growth reduce carbon emission? Evidence from OECD countries and China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xueli Chen ◽  
Wanshu Ma ◽  
Vivian Valdmanis
Keyword(s):  
Labor Productivity ◽  
Fixed Effects ◽  
Oecd Countries ◽  
Environmental Indicators ◽  
Ekc Hypothesis ◽  
Initial Development ◽  
Content Type ◽  
Per Capita ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this study is to examine the challenges involved in the trade-offs of labor productivity and per capita carbon dioxide (CO2) emission.Design/methodology/approachIn this research, we used a balanced dataset of 36 OECD countries and China between 1990 and 2018. We examined the relationship between labor productivity and per capita CO2 emission for OECD countries and China based on an Environmental Kuznets Curve (EKC) hypothesis. Further, the fixed effects model of estimation was employed to examine the impact of variables during the sample period and explore the relationship between predictor and outcome variables within an entity while controlling for all time-invariant differences.FindingsThis study confirmed the existence of the N-shape EKC hypothesis in 36 OECD countries and China. This implies that at the initial development stage, per capita CO2 emission increased with labor productivity; however, after reaching certain threshold, per capita CO2 emission began to fall with rising labor productivity. Then the per capita CO2 emission rises again when labor productivity continually increases.Originality/valueIn this study, we explored the dynamic association between labor productivity and per capita CO2 emissions for 36 OECD countries and China under the EKC framework from 1990 to 2018 by using the labor productivity and per capita CO2 emission as economic and environmental indicators of one country respectively. This study’s contribution showed the following: first, the empirical findings confirmed the N-shape relationship between labor productivity and per capita CO2 emissions for 36 OECD countries and China; second, the findings demonstrated that the association among the underlying variables by testing through the fixed effect model.

The Employment –Wage Relationship Was Keynes right after all?

2008 ◽  
Vol 6 (1) ◽  
Author(s):  
Nicholas Apergis ◽  
Keyword(s):  
Real Wage ◽  
Panel Cointegration ◽  
Oecd Countries ◽  
Statistical Evidence ◽  
Real Wages ◽  
Long Run ◽  
Short Run

This paper investigates the existence and direction of a relationship between real wages and employment. Using a panel from ten different OECD countries, from 1950 to 2005, it applies panel cointegration and causality methodology. This study finds statistical evidence for a long run relationship between these two variables. However, it firmly rejects the hypothesis that wages cause employment in the short-run. Thus the results support Keynes’s view namely, real wages fall because employment increases, presumably via an increase in demand. The results imply that real wage reduction is not sufficient to induce an expansion of output and employment.

scholarly journals The Relationship between Real Wages and Output: Evidence from Pakistan

2000 ◽  
Vol 39 (4II) ◽  
pp. 1111-1126 ◽  
Author(s):  
Afia Malik ◽  
Ather Maqsood Ahmed
Keyword(s):  
Business Cycles ◽  
Interest Rates ◽  
Real Wage ◽  
Phillips Curve ◽  
Labour Supply ◽  
Nominal Wage ◽  
Purchasing Power ◽  
Real Wages ◽  
The Real ◽  
The Relationship

Information on wage levels is essential in evaluating the living standards and conditions of work and life of the workers. Since nominal wage fails to explain the purchasing power of employees, real wage is considered as a major indicator of employees purchasing power and can be used as proxy for their level of income. Any fluctuations in the real wage rate have a significant impact on poverty and the distribution of income. When used in relation with other economic variables, for instance employment or output they are valuable indicators in the analysis of business cycles. There has been a long debate regarding the relationship between real wages and the employment (output). Despite the apparent simplicity, the relationship between real wages and output has remained deceptive both theoretically and empirically. Keynes (1936) viewed cyclical movements in employment along a stable labour demand schedule thus indicating counter cyclical real wages. His deduction is in line with sticky wages and sticky expectations, which augments models like Phillips curve. In these models real wages behaved as counter-cyclical as nominal wages are slow to adjust during recession (decrease in aggregate demand and associated slowdown in price growth). Stickiness of wages or expectations shifts the labour supply over the business cycles [Abraham and Haltiwanger (1995)]. Barro (1990) and Christiano and Eichenbaum (1992) have associated these labour supply shifts with intertemporal labour-leisure substitution. This in response to temporary changes in real interest rates (fiscal policy shocks) could yield counter-cyclical real wages. However, Long and Plosser (1983) and Kydland and Prescott (1982) while studying the real business cycle models highlight on the technology shocks which leads to pro-cyclical real wages.

scholarly journals Real Wages and Labor Productivity in Britain and Germany, 1871–1938: A Unified Approach to the International Comparison of Living Standards

2010 ◽  
Vol 70 (2) ◽  
pp. 400-427 ◽  
Author(s):  
Stephen Broadberry ◽  
Carsten Burhop
Keyword(s):  
Labor Productivity ◽  
Real Wage ◽  
Service Sector ◽  
Wage Gap ◽  
Living Standards ◽  
Industrial Workers ◽  
Unified Approach ◽  
Real Wages ◽  
Sectoral Differences ◽  
German Worker

Throughout the period 1871–1938, the average British worker was better off than the average German worker, but there were significant differences between major sectors. For the aggregate economy, the real wage gap was about the same as the labor productivity gap, but again there were important sectoral differences. Compared to their productivity, German industrial workers were poorly paid, whereas German agricultural and service sector employees were overpaid. This affected the competitiveness of the two countries in these sectors. There were also important differences in comparative real wages by skill level, affecting the extent of poverty.

scholarly journals The Relationship between Labor Productivity and Economic Growth in OECD Countries

2017 ◽  
Vol 9 (5) ◽  
pp. 71 ◽  
Author(s):  
Suna Korkmaz ◽  
Oya Korkmaz
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Labor Productivity ◽  
Panel Data Analysis ◽  
Developed Countries ◽  
Oecd Countries ◽  
Factor Productivity ◽  
The Developed Countries ◽  
Partial Factor Productivity ◽  
The Relationship

In the course of globalization, the countries entered into an intense competition between each other. In order to achieve the competitive advantage, countries pay significant importance to the technological advancements. By improving the productivity, the technological innovations and developments allow the countries to make production at lower costs. The increase in factor productivities would enable higher levels of output in the economy. Since the factor productivity influences many other factors and the developed countries meet these criteria better than developing countries do, the factor productivities are higher in developed countries, when compared to those in developing countries. For this reason, in this study, the relationship between labor productivity, which is a partial factor productivity, and economic growth in seven OECD countries for the period between 2008 and 2014 by utilizing the panel data analysis method. According to the test results, we find a unidirectional causality relationship from economic growth to labor productivity.

scholarly journals Labor Productivity And Real Wages In Macedonia: An Overview Before And After The Global Economic Crisis

2016 ◽  
Vol 12 (10) ◽  
pp. 352
Author(s):  
Predrag Trpeski ◽  
Ljupcho Eftimov ◽  
Marijana Cvetanoska
Keyword(s):  
Labor Productivity ◽  
Economic Crisis ◽  
Opposite Direction ◽  
Opposite Sign ◽  
Quantitative Relationship ◽  
Real Wages ◽  
The Real ◽  
Before And After ◽  
The Impact ◽  
The Relationship

The aim of the paper is to examine the relationship between the labor productivity and real net wages in Macedonia at the level of the whole economy, and in the sectors of industry and agriculture, both, in the period 2006-2015, i.e. shortly before the commencement and after the Great financial and economic crisis. The paper starts from the assumption that greater labor productivity causes changes in real net wages which are in the same direction. Studies that are previously made show that there is an expressed quantitative relationship between the labor productivity and real net wages in Macedonia in the period 1995-2003. But results obtained in this paper show that the Great financial and economic crisis has influence on this relations. Thus, quantitative relationship between labor productivity and real net wages in the analyzed period is very low, and even that their relationships are with the opposite sign. This leads to the conclusion that during and the period after the crisis, changes in labor productivity did not have an impact on the real net wages in Macedonia, or they had a little impact, and in some cases the impact is in the opposite direction. Taking into consideration that in the period during and after crisis are recorded small but permanent increasing of the wages in the country, it is obvious that such increase is not due to changes in labor productivity but more to other factors.

scholarly journals Payroll Share, Real Wage and Labor Productivity across US States

2020 ◽  
pp. 1-41
Author(s):  
Ivan Mendieta-Muñoz ◽  
Codrina Rada ◽  
Ansel Schiavone ◽  
Rudi von Arnim
Keyword(s):  
Mixture Models ◽  
Labor Productivity ◽  
Real Wage ◽  
Real Wages ◽  
Relative Prices ◽  
Us States ◽  
High Performing ◽  
Joint Distributions ◽  
The Us ◽  
Index Decomposition

This paper analyzes regional contributions to the US payroll share from 1977 to 2017 and the four major business cycles throughout this period. We implement two empirical exercises. First, we decompose the US payroll share across states. Utilizing a Divisia index decomposition technique yields exact contributions of real wages, employment structure, labor productivity and relative prices across the states to the aggregate change in the payroll share. Key findings are that the decline in the aggregate (i) is driven by decoupling between real wage and labor productivity; and (ii) is initially driven by the rust belt states, but subsequently dominated by relatively large states. Second, we employ mixture models on real wages and labor productivity across US states to discern whether distinct mechanisms appear to generate these distributions. Univariate models (iii) indicate the possibility that two distinct mechanisms generate state labor productivities, raising the question of whether regional dualism has taken hold. Lastly, we use bivariate mixture models to investigate whether such dualism and decoupling manifest in the joint distributions of payroll shares and labor productivity, too. Results (iv) are affirmative, and further suggest a tendency for high performing states to have relatively high payroll shares initially, and low payroll shares more recently.

Recent trends in labor productivity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Guzel Salimova ◽  
Alisa Ableeva ◽  
Aygul Galimova ◽  
Ramzilya Bakirova ◽  
Tatiana Lubova ◽  
...  
Keyword(s):  
Labor Force ◽  
Labor Productivity ◽  
Rate Of Change ◽  
Impact Factors ◽  
Technical Equipment ◽  
Real Wages ◽  
Content Type ◽  
Applied Model ◽  
Second Stage Labor ◽  
The Relationship

PurposeUsing the example of Russia, this paper studied and analyzed productivity of the labor force in agriculture as an important industry for ensuring the sustainable development of the country.Design/methodology/approachAt the first examination stage, the time series of data on labor productivity and real wages in agri-food companies were examined as modern works on the matter tend to highlight the relationship between productivity and remuneration insufficiently. At the second stage, labor productivity was assessed through the rate of change in the share of wages in the gross domestic product. At the last stage, an applied model of the relationship between labor productivity in agriculture and various impact factors was developed.FindingsIt showed that the efficiency of the labor force in the considered area depends greatly on technical equipment and crop yield. Besides, the study findings revealed that the traditional economic relationship between productivity and wages is invalid in the examined regions of Russia. There is a significant reserve for increasing labor productivity by providing additional motivation for employees.Originality/valueThe successful development of agricultural production can be achieved by implementing innovations, facilitating digitalization, attracting investments, increasing the level of interest of those employed in labor results and producing high-quality goods.

Electricity consumption and economic growth in ASEAN

2017 ◽  
Vol 5 (2) ◽  
pp. 16
Author(s):  
Ahmad Ghazali Ismail ◽  
Arlinah Abd Rashid ◽  
Azlina Hanif
Keyword(s):  
Economic Growth ◽  
Energy Use ◽  
Electricity Consumption ◽  
Panel Estimation ◽  
Real Gdp ◽  
Long Run ◽  
Bidirectional Relationship ◽  
Short Run ◽  
Using Data ◽  
The Relationship

The relationship and causality direction between electricity consumption and economic growth is an important issue in the fields of energy economics and policies towards energy use. Extensive literatures has discussed the issue, but the array of findings provides anything but consensus on either the existence of relations or direction of causality between the variables. This study extends research in this area by studying the long-run and causal relations between economic growth, electricity consumption, labour and capital based on the neo-classical one sector aggregate production technology mode using data of electricity consumption and real GDP for ASEAN from the year 1983 to 2012. The analysis is conducted using advanced panel estimation approaches and found no causality in the short run while in the long-run, the results indicate that there are bidirectional relationship among variables. This study provides supplementary evidences of relationship between electricity consumption and economic growth in ASEAN.

Sign in / Sign up

Export Citation Format

Share Document