Do wages reflect labor productivity? The case of Belgian regions

Jozef Konings, Luca Marcolin

Research output: Contribution to journalArticlepeer-review

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 languageEnglish
Article number11
JournalIZA Journal of European Labor Studies
Volume3
Issue number1
DOIs
Publication statusPublished - Dec 1 2014

ASJC Scopus subject areas

  • Industrial relations
  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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