ERIC Number: ED401479
Record Type: Non-Journal
Publication Date: 1996
Reference Count: N/A
Wage Differentiation and Long-Term Unemployment. An International Comparison. IAB Labour Market Research Topics No. 19.
The relationship between wage differentiation and long-term unemployment was examined in a study that considered data regarding long-term unemployment and minimum wages in the United States, Japan, and 10 member nations of the Organisation for Economic Cooperation and Development. Data regarding wages and unemployment in the 11 countries were analyzed to determine the effect of minimum wages on employment and unemployment and the relationship between long-term unemployment and wage disparity. In the data analysis, consideration was given to the differences between individual countries' wage replacement payments, wage negotiations, and labor market policies. After those factors had been taken into account, it was determined that larger wage disparity (or a lower first decile ratio of the distribution of incomes) decreases the relative number of long-term unemployed among the total number of unemployed individuals in a given country. The study confirmed the neoclassical standard model of the labor market with perfect competition and contradicted U.S. studies that could not find any negative employment after the minimum wage increases in the United States in the late 1980s and early 1990s. The implications of the study findings were discussed within the context of Germany's labor market and labor market policies. (Contains 42 references.) (MN)
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: Institute of Employment Research, Nurenberg (Germany).
Identifiers - Location: Japan; United States