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Wage Dynamics Network (WDN)

WDN News

  • How did European firms adjust during the great recession (2010-2013)? Country reports using WDN3 survey data are now available (see "Research output" below).
About the network

The Wage Dynamics Network (WDN) is a research network consisting of economists from the European Central Bank (ECB) and the National Central Banks (NCBs) of the EU Member States, which together make up the European System of Central Banks (ESCB).

The WDN initially operated from 2006 to 2009 and resumed its activities, in part, in 2013.

At present, 25 NCBs participate in the WDN, which  is chaired by Juan F. Jimeno (Banco de España), with Ana Lamo (Directorate General Research – ECB) acting as secretary  The network is expected to be in operation until the end of 2016.

During its first phase, in 2006-09, the WDN was chaired by Frank Smets (ECB), again with Ana Lamo (ECB) as secretary. The network at that time was composed of researchers from 24 National Central Banks and the ECB.

Research focus

The WDN’s current research focus is to assess labour market adjustments in the period 2010-13 and how firms have reacted to the labour market reforms that have taken place in these years in EU Member States.

To this end, in 2014 the network launched an ad hoc survey of firms, the WDN3 survey. 25 ESCB countries are participating in this survey (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, France, Greece, Germany, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands Poland, Portugal, Romania, Slovakia, Slovenia, Spain and the United Kingdom).

The WDN3 survey is in fact a follow up of the survey developed during phase one of the network (2006-09). At that time, the WDN’s research goal was to:

  1. identify the sources and features of wage and labour cost dynamics that are most relevant for monetary policy
  2. clarify the relationship between wages, labour costs and prices at both the firm and the macroeconomic level.

During phase one, the WDN’s activities were organised around three research groups: the macro group, the micro group and the survey group.

Macro group. The macro group explored the empirical characterisation of aggregate, country and sectoral wage and labour cost dynamics in the euro area, and conducted a structural analysis of their determinants and their interaction with inflation dynamics. Frank Smets (ECB) was the contact person for the macro group.

Micro group. The micro group investigated:

  1. enterprises’ different responses to shocks via employment, wages, and prices
  2. cross-country differences in the adjustment of relative wages to macroeconomic developments
  3. the nature and magnitude of possible wage rigidities across countries and sectors in the euro area.

Juan F. Jimeno (Banco de España) was the contact person for the micro group.

Survey group. The survey group launched an ad hoc survey on wages, labour costs and price-setting behaviour in 2007 (WDN1).

In summer 2009 it embarked on the first follow-up survey (WDN2) to collect information on firms’ reactions to the first stages of the global crisis. Silvia Fabiani (Banca d’Italia) was the contact person for the survey group.

Research output

Reports

WDN3 Survey country reports

The country reports summarise the evidence on firms’ reaction to the crisis and to the reforms implemented in 2010-13, as provided by the WDN3 survey launched in late 2014–early 2015.

WDN (2006-09) reports
  • 2008 WDN Progress Report last update: 25 September 2009
    The 2008 Progress Report summarises the evidence found by WDN from 2006 to the end of 2008.
  • 2009 WDN Final Report last update: 07 January 2010
    The WDN Final Report summarises the evidence found by the WDN during its first phase, 2006-09.

Working papers

Survey Group
No. 1314
01 Apr 2011
Price and wage setting in Portugal: learning by asking
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No. 1274
03 Dec 2010
Firms' reactions to the crisis and their consequences for the labour market. Results of a company survey conducted in Austria
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No. 1225
16 Jul 2010
Price and wage formation in Portugal
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No. 1224
16 Jul 2010
Wages, labor or prices: how do firms react to shocks?
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No. 1198
20 May 2010
Wage and price setting behaviour of Lithuanian firms
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No. 1181
21 Apr 2010
Wage setting and wage flexibility in Ireland - Results from a firm-level survey
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No. 1164
31 Mar 2010
Price, wage and employment response to shocks: evidence from the WDN survey
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No. 1153
23 Feb 2010
The determination of wages of newly hired employees: survey evidence on internal versus external factors Published in: Labour Economics, Vol 19 (5), 2012: pp 802-812
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No. 1106
12 Nov 2009
The margins of labour cost adjustment: survey evidence from European firms Published in: Labour Economics, Vol 19 (5), October 2012: pp 792-801
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No. 1105
12 Nov 2009
Downward Nominal and Real Wage Rigidity: Survey Evidence from European Firms Published in: The Scandinavian Journal of Economics, Vol 112 (4), December 2010: pp 884-910
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No. 1102
29 Oct 2009
Wage-setting behavior in France: additional evidence from an ad-hoc survey
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No. 1084
24 Aug 2009
How are firms' wages and prices linked: survey evidence in Europe
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Macro Group
No. 1302
28 Feb 2011
The immigrant/native wealth gap in Germany, Italy and Luxembourg
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No. 1183
21 Apr 2010
Labor market institutions and the business cycle - unemployment rigidities vs. real wage rigidities
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No. 1180
21 Apr 2010
Nominal and real wage rigidities. In theory and in Europe
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No. 1080
24 Aug 2009
Productivity and job flows: heterogeneity of new hires and continuing jobs in the business cycle
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No. 1067
03 Jul 2009
The dynamic effects of shocks to wages and prices in the United States and the euro area
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No. 1053
15 May 2009
Inflation dynamics with labour market matching: assessing alternative specifications
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No. 1048
28 Apr 2009
Downward wage rigidity and optimal steady-state inflation
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No. 1047
24 Apr 2009
The impact of reference norms on inflation persistence when wages are staggered
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No. 1036
24 Mar 2009
Search in the product market and the real business cycle Published in: The Journal Economic Dynamics and Control (forthcoming)
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No. 1035
24 Mar 2009
The role of labor markets for euro area monetary policy Published in: European Economic Review, Vol 53, 2009: pp 908-936
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No. 1022
04 Mar 2009
Understanding inter-industry wage structures in the euro area Published in: Applied Economics, Taylor and Francis Journals, Vol 43 (11): pp 1299-1313
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No. 1007
12 Feb 2009
Sequential bargaining in a new-Keynesian model with frictional unemployment and staggered wage negotiation
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No. 1005
12 Feb 2009
Labor market institutions and macroeconomic volatility in a panel of OECD countries
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No. 974
02 Dec 2008
Institutional features of wage bargaining in 23 European countries, the US and Japan Published in: Ekonomia, Vol 12 (2), Winter 2009: pp 57-108
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No. 963
13 Nov 2008
Public and private sector wages: co-movement and causality Published in: The Scandinavian Journal of Economics as "Public or private sector wage leadership? An international perspective" (forthcoming) and Journal of Policy Models as "Are government wages decoupled from private sector wages" (forthcoming)
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No. 945
13 Oct 2008
Wage and price dynamics in Portugal
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No. 923
26 Aug 2008
Resuscitating the wage channel in models with unemployment fluctuations Published in: Journal of Monetary Economics, Vol 55 (5), 2008
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Micro Group
No. 1325
08 Apr 2011
Wage structure effects of international trade: evidence from a small open economy Published in: Review of World Economics, Vol 148 (2), June 2012: pp 297-331
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No. 1308
09 Mar 2011
Myopic governments and welfare-enhancing debt limits
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No. 1269
01 Dec 2010
Downward wage rigidity and automatic wage indexation: evidence from monthly micro wage data
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No. 1268
16 Nov 2010
Changes in the Austrian structure of wages, 1996-2002: evidence from linked employer-employee data
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No. 1242
15 Sep 2010
Changes in the Czech wage structure: Does immigration matter?
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No. 1213
25 Jun 2010
The incidence of nominal and real wage rigidity: an individual-based sectoral approach Published in: Journal of the European Economic Association, Vol 8 (2-3), April-May 2010: pp 487-496
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No. 1199
20 May 2010
Changes in the wage structure in EU countries
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No. 1184
21 Apr 2010
Costs, demand, and producer price changes
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No. 1182
21 Apr 2010
Inter-industry wage differentials in EU countries: what do cross-country time varying data add to the picture? Published in: Journal of the European Economic Association, Vol 8 (2-3): pp 478-86
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No. 1159
26 Feb 2010
Wages and the risk of displacement
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No. 1103
21 Oct 2009
Inter-industry wage differentials: how much does rent sharing matter? Published in: The Manchester School, Vol 79 (4), July 2011: pp 691-717
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No. 1083
24 Aug 2009
Evaluating microfoundations for aggregate price regidities: evidence from matched firm-level data on product prices and unit labor cost
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No. 1080
24 Aug 2009
Productivity and job flows: heterogeneity of new hires and continuing jobs in the business cycle
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No. 1074
16 Jul 2009
Wages are flexible aren't they? Evidence from monthly micro wage data
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No. 1021
04 Mar 2009
Rigid labour compensation and flexible employment? Firm-level evidence with regard to productivity for Belgium
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No. 1006
12 Feb 2009
Understanding sectoral differences in downward real wage rigidity: workforce composition, institutions, technology and competition Published in: Journal for Labour Market Research, Vol 45 (1), March 2012: pp 7-22
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No. 1003
19 Feb 2009
Real wages over the business cycle: OECD evidence from the time and frequency domains Published in: Journal of Economic Dynamics and Control Vol 33 (6), 2009: pp 1183-1200
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No. 964
12 Nov 2008
Do firms provide wage insurance against shocks? Evidence from Hungary
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No. 893
16 May 2008
Sticky wages: evidence from quarterly microeconomic data
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No. 854
25 Jan 2008
How do firms adjust their wage bill in Belgium? A decomposition along the intensive and extensive margins Published in: Labour Economics, Vol 16 (3), 2009: pp 320-329
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No. 840
17 Dec 2007
Downward wage rigidity for different workers and firms: an evaluation for Belgium using the IWFP procedure Published in: Brussels Economic Review, Vol 55 (1), Spring 2012: pp 5-32
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WDN Survey Data
WDN3 survey, 2014

The on-going third wave of the WDN survey (WDN3) aims to assess recent labour market adjustments and how firms have reacted to the labour market reforms that took place between 2010 and 2013. 25 ESCB countries are participating in this third wave (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, France, Greece, Germany, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands Poland, Portugal, Romania, Slovakia, Slovenia, Spain and the United Kingdom). Data collection took place during 2014 and the beginning of 2015. Several research projects are currently in progress.

Access to survey data, WDN3. A cross-country harmonised data set is available to staff from the participating NCBs and the ECB.

WDN2 survey, 2009

In 2009 ten NCBs (Austria, Belgium, Czech Republic, Estonia, France, Italy, Luxembourg, the Netherlands, Poland and Spain) conducted a follow-up, more limited, survey which was specifically designed to understand firms’ reactions to the initial stages of the crisis. The total sample for this follow-up survey covers around 5,700 firms.

The results of the WDN2 survey are summarised in the following working paper:

No. 1778
07 Apr 2015
European firm adjustment during times of economic crisis
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WDN1 survey, 2007

The WDN1 survey was carried out by 17 EU national central banks (Austria, Belgium, Czech Republic, Estonia, France, Greece, Germany Hungary, Italy, Ireland, Lithuania, the Netherlands, Luxembourg, Poland, Portugal, Slovenia and Spain) between the end of 2007 and the first half of 2008. It collected information from over 17,000 firms. Malta, Cyprus, Bulgaria and Slovakia launched the survey at a later stage.

Several research papers and other works have been produced within the WDN using the survey data. The following papers, using WDN1 survey data for 15 countries (Austria, Belgium, Czech Republic, Estonia, France, Greece, Hungary, Italy, Ireland, Lithuania, the Netherlands, Poland, Portugal, Slovenia and Spain), are published in Labour Economics.

Request access to WDN1 and WDN2 survey data

Data from WDN1 are available for the following 13 countries: Austria, Czech Republic, Estonia, France, Greece, Hungary, Italy, Ireland, Lithuania, the Netherlands, Portugal, Slovenia and Spain. In addition, data for Slovakia (not included in the papers) are also available for researchers.

WDN2 data are available to researchers for the following 8 countries: Austria, Czech Republic, Estonia, France, Italy, the Netherlands, Poland and Spain.