Do wages reflect labor productivity? The case of Belgian regions

Jozef Konings; Luca Marcolin

doi:10.1186/2193-9012-3-11

Do wages reflect labor productivity? The case of Belgian regions

Jozef Konings, Luca Marcolin

Economics Department

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4 Citations (Scopus)

Abstract

We simultaneously estimate a wage and a labor productivity equation where we include regional dummies as explanatory variables. We find that the wage-productivity gap reached 11% for Brussels and 4.2% for Wallonia in the years 2005-2012. This was driven by the negative performance in labor productivity of firms in these regions relative to Flanders, which more than compensated for the advantage in average salary cost they enjoyed. These results are coherent with the existence at the regional level of institutional barriers to the firm-level adjustment of wages to labor productivity. JEL codes: J24; J31; J5; R23

Original language	English
Article number	11
Journal	IZA Journal of European Labor Studies
Volume	3
Issue number	1
DOIs	https://doi.org/10.1186/2193-9012-3-11
Publication status	Published - Dec 1 2014

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ASJC Scopus subject areas

Industrial relations
Economics and Econometrics
Organizational Behavior and Human Resource Management

Cite this

Konings, J., & Marcolin, L. (2014). Do wages reflect labor productivity? The case of Belgian regions. IZA Journal of European Labor Studies, 3(1), [11]. https://doi.org/10.1186/2193-9012-3-11

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10.1186/2193-9012-3-11