Full Citation

Title: Are Individual Characteristics all that Matters in Earnings Determination? Evidence from the US and Germany

Citation Type: Working Paper

Publication Year: 2015

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Abstract: Industry wage differentials may result either from the structure of the industry (demand type) or human capital (supply type) characteristics of the employed labour force. This study uses two major data sets from Germany and the US that allow the investigation of the effects of these demand and supply type factors on average earnings across industries. The main contribution of the paper shows that aggregate demand relevant to the particular industry has a strong positive effect on the industry's average earnings in addition to the previously established results regarding the significance of the effects of worker and firm characteristics. Consequently, labour market policies, which address solely the characteristics of the workforce and their human capital without due consideration of the macroeconomic environment and the structure of the industry, should be expected to produce the disappointing results of an increasing share of low pay employment in the wage distribution.

Url: http://aura.abdn.ac.uk/bitstream/handle/2164/5700/DP_2015_14.pdf?sequence=1

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Authors: Mccausland, W D; Summerfield, F; Theodossiou, I

Series Title: Discussion Paper in Economics

Publication Number: 15-14

Institution: University of Aberdeen

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Data Collections: IPUMS USA, IPUMS CPS

Topics: Labor Force and Occupational Structure, Other

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