Co-movements between public and private wages in the EU: what factors and with what policy implications?

IZA Journal of European Labor Studies

Table 1 Long-run and short-run relation between manufacturing and general government compensations per employee, EU countries 1980–2013

	(1)	(2)
	Dynamic long-run relation	Error correction model
Dependent variable: log of manufacturing compensation per employee, level (long-run relation) and change (ECM)
∆ log government compensations p.e.		0.249***
		[7.117]
∆ log productivity in manufacturing		0.188***
		[5.426]
∆ unemployment rate		−0.00162*
		[−1.578]
∆ log consumer price index		0.693***
		[19.51]
Log of consumer price index	0.687***
	[9.410]
Log of government compensations p.e.	0.435***
	[7.968]
Log of productivity in manufacturing	0.209***
	[9.004]
Unemployment rate	0.0057***
	[3.421]
Lagged error correction term		−0.122***
		[−3.140]
Constant	−1.087***	0.00715***
	[−7.009]	[3.273]
Observations	407	407
R ²	0.98	0.631
Number of countries	17	17

Estimation method: dynamic OLS with fixed effects and Newey West standard errors and ECM with standard errors robust with respect to heteroskedasticity and non-independence within country clusters. Sample: EU countries, except AT, BG, CY, DE, EL, HR, LT, LV, MT, RO and SI
Robust t-statistics: ***p < 0.01; **p < 0.05; *p < 0.1