IMF Staff Country Reports

Netherlands: Selected Background Issues

Publication Date:

June 8, 1995

Summary:

This paper analyzes whether the lower increase in wages was a factor in the labor productivity and employment developments in the Netherlands. It argues that there is indeed such a link: rapid wage growth leads to a substitution of capital for labor, and hence to less labor-intensive production; slow wage growth leads to less rapid growth of labor productivity and, for the same output growth, results in a better employment performance. The paper also discusses the causes of the lower wage growth in the Netherlands.

Series:

Country Report No. 1995/049

Subject:

Employment Labor Production Productivity Real wages Wages

Notes:

This report on selected background issues in the Kingdom of the Netherlands was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with this member country. In releasing this document for public use, confidential material may have been removed at the request of the member.