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

IZA Journal of European Labor Studies

Table 3 Long-run and short-run relation between manufacturing and government compensations per employee, conditional on government wage setting model, EU countries 1980–2013

	(1)	(2)	(3)	(4)
	Dynamic long-run relation		Error correction model
	Bargaining	Decision	Bargaining	Decision
Dependent variable: manufacturing compensations, level and change (log)
∆ log government compensations p.e.			0.360***	0.215***
			[6.745]	[5.980]
∆ log productivity in manufacturing			0.156**	0.218***
			[3.324]	[4.935]
∆ unemployment rate			−0.00210*	−0.00155
			[−2.199]	[−1.405]
∆ log consumer price index			0.629***	0.705***
			[6.781]	[24.51]
Log of consumer price index	0.458***	0.705***
	[5.945]	[7.019]
Log of government compensations p.e.	0.528***	0.481***
	[9.669]	[5.083]
Log of productivity in manufacturing	0.241***	0.0941**
	[11.28]	[2.191]
Unemployment rate	−0.00676***	0.00166
	[3.875]	[0.621]
Lagged error correction term			−0.146***	−0.142**
			[−3.670]	[−2.891]
Constant	−0.753***	−2.367***	0.00593*	0.00639**
	[−5.667]	[−6.757]	[1.905]	[2.456]
Observations	224	183	224	183
R ²	0.993	0.987	0.637	0.643
Number of countries	8	9	8	9

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