TY  - RPRT
        AU  - Börschlein, Erik-Benjamin
AU  - Bossler, Mario
AU  - Popp, Martin
        TI  - Scarce Workers, High Wages?
        PY  - 2024/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17447
        UR  - https://www.iza.org/index.php/publications/dp17447
        AB  - Labor market tightness tremendously increased in Germany between 2012 and 2022. We analyze the effect of tightness on wages by combining social security data with unusually rich information on vacancies and job seekers. Instrumental variable regressions reveal positive elasticities between 0.004 and 0.011, implying that higher tightness explains between 7 and 19 percent of the real wage increase. We report greater elasticities for new hires, high-skilled workers, the Eastern German labor market, and the service sector. In particular, tightness raised wages at the bottom of the wage distribution, contributing to the decline in wage inequality over the last decade.
        KW  - labor market tightness
KW  - wages
KW  - labor shortage
KW  - occupations
KW  - wage inequality
        ER  -