ABSTRACT
This chapter has three purposes. First, we will give an overview of aggregate wage formation analysing the pattern of wage growth and wage differentiation in the four countries included in this study. Second, the relationship between earnings inequality, earnings mobility and low pay is analysed in order to evaluate the consequences of low pay. Does taking a low-paid job give access to a better paid job later on or is it a trap leading to poverty? Third and finally, clarify how labour market institutions affect the pattern of wage growth. This will be done by analysing the relationship between unemployment and wage growth applying the Phillips curve argument, which in its classic version documents an inverse relationship between nominal-wage growth and unemployment. How does this relationship hold for our four countries and how can variations in the relationship be explained historically and nationally?
