Wage Phillips Curve of a Large Emerging Economy: Role of Structural Heterogeneity

Harendra Behera, Debojyoti Mazumder and Kaustubh .

MPRA Paper from University Library of Munich, Germany

Abstract: The paper finds the role of dynamic structural heterogeneity in establishing the empirical existence and convexity of the wage Phillips curve for large emerging economies. Using Indian state-level data, we find a negative and convex relationship between earnings growth and unemployment after controlling for structural labour market factors that vary over time and across states. The fixed effects regression model suggests that a higher speed of formalization makes the wage-Phillips curve flatter, controlling for changes in the composition of labour supply and skilling.

Keywords: Unemployment; Wage growth; Wage Phillips curve; Emerging Economies (search for similar items in EconPapers)
JEL-codes: E60 J20 J30 (search for similar items in EconPapers)
Date: 2025-04-28
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