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

IZA Journal of European Labor Studies

Table 5 Asymmetric short-run relation between manufacturing and government compensations per employee, EU countries 1980–2013

	(1)	(2)	(3)	(4)
	Error correction model		Error correction model (−)
	Positive	Negative	Large government sector	Small government sector
Dependent variable: manufacturing compensations, change (log)
∆ real government compensations p.e.	0.412**	0.409**	0.386*	0.413**
	[7.392]	[6.114]	[3.078]	[7.143]
∆ productivity in manufacturing	0.285**	0.300**	0.347**	0.222
	[3.497]	[3.852]	[4.409]	[1.547]
∆ unemployment rate	−0.00226*	−0.00234	−0.00347*	−0.000848
	[−2.205]	[−1.641]	[−2.414]	[−0.469]
Lagged error correction term (+)	−0.314**
	[−2.963]
Lagged error correction term (−)		−0.330**	−0.253+	−0.354**
		[−4.296]	[−2.257]	[−4.276]
Constant	0.0228**	0.00974**	0.0135**	0.00825
	[5.549]	[4.193]	[5.669]	[1.826]
Observations	407	407	193	214
R²	0.314	0.319	0.429	0.255
Number of countries	17	17	8	9

Estimation method: dynamic OLS with fixed effects and Newey West standard errors (not shown) 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