Wage Dynamics Network (WDN)
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.
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. 24 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 and 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:
- identify the sources and features of wage and labour cost dynamics that are most relevant for monetary policy
- 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:
- enterprises’ different responses to shocks via employment, wages, and prices
- cross-country differences in the adjustment of relative wages to macroeconomic developments
- 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.
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.
- 2008 WDN Progress Report last update: 25 de septiembre de 2009 The 2008 Progress Report summarises the evidence found by WDN from 2006 to the end of 2008.
- 2009 WDN Final Report last update: 7 de enero de 2010 The WDN Final Report summarises the evidence found by the WDN during its first phase, 2006-09.
Working papers
- 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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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.
- Babecký, J., Du Caju, P., Kosma, D., Lawless, M., Messina, J. and T. Rõõm, How do European firms adjust their labour costs when nominal wages are rigid?
- Bertola, G., Dabusinskas, A., Hoeberichts, M., Izquierdo, M., Kwapil, C., Montornès, J. and R. Radowski , Price, wage and employment response to shocks - evidence from the WDN survey.
- Druant M., S. Fabiani, G. Kezdi, A. Lamo, F. Martins and R. Sabbatini, Firms' price and wage adjustment in Europe: Survey evidence on nominal stickiness.
- Galuscak K., Keeney, M., Nicolitsas, D., Smets, F., Strzelecki, P. and M. Vodopivec, The determination of wages of newly hired employees: survey evidence on internal versus external factors.
- Wasmer Etienne An introduction to the special feature section: Price, wage and employment adjustments in 2007–2008 and some inference for the current European crisis.
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.
WDN3 data are available for the following 25 countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and the United Kingdom.
Request for access to the Wage Dynamics Network survey data (WDN1, WDN2 and WDN3)