The Effect of Industry-Level Aggregate Demand on Earnings: Evidence from the US

W. D. McCausland (), Fraser Summerfield and Ioannis Theodossiou
Additional contact information
W. D. McCausland: University of Aberdeen

Journal of Labor Research, 2020, vol. 41, issue 1, No 4, 102-127

Abstract: Abstract Economic theory suggests that workers’ pay is mainly determined by their marginal product and that industry wage differentials may result either from the structure of the industry (demand type factors) or human capital characteristics of the employed labour force (supply type factors). This study uses a major data set from the US that allows the investigation of the effects of these demand and supply type factors on average earnings across industries. Importantly, this paper shows that aggregate demand relevant to the particular industry has a strong positive effect on the industry’s average earnings in addition to the previously established results regarding the significance of the effects of worker and firm characteristics. Consequently, labour market policies crafted without due consideration of macroeconomic demand may be ineffective as a solution to the proliferation of low pay employment.

Keywords: Macroeconomic demand; Industrial earnings (search for similar items in EconPapers)
JEL-codes: E24 J31 J63 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s12122-020-09299-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jlabre:v:41:y:2020:i:1:d:10.1007_s12122-020-09299-z

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/12122

DOI: 10.1007/s12122-020-09299-z

Access Statistics for this article

Journal of Labor Research is currently edited by Ozkan Eren

More articles in Journal of Labor Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().