TY  - JOUR
AU  - Freeman,Richard B.
AU  - Schettkat,Ronald
TI  - Skill Compression, Wage Differentials and Employment: Germany vs. the US
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7610
PY  - 2000
Y2  - March 2000
UR  - http://www.nber.org/papers/w7610
L1  - http://www.nber.org/papers/w7610.pdf
N1  - Author contact info:
Richard B. Freeman
NBER
1050 Massachusetts Avenue
Cambridge, MA  02138
Tel: 617/868-3900
Fax: 617/868-2742
E-Mail: freeman@nber.org
AB  - Germany's more compressed wage structure is taken by many analysts as the main cause of the German-US difference in job creation. We find that the US has a more dispersed level of skills than Germany but even adjusted for skills, Germany has a more compressed wage distribution than the US. The fact that jobless Germans have nearly the same skills as employed Germans and look more like average Americans than like low skilled Americans runs counter to the wage compression hypothesis. It suggests that the pay and employment experience of low skilled Americans is a poor counterfactual for assessing how reductions in pay might affect jobless Germans.
ER  -