Wage Growth and Labor Market Slack during the COVID-19 Pandemic: Evidence from Philippine Regions

John Paul Corpus, Ma. Christina Epetia and Margarita Debuque-Gonzales
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John Paul Corpus: Bangko Sentral ng Pilipinas
Margarita Debuque-Gonzales: Bangko Sentral ng Pilipinas

No 202517, BSP Discussion Paper Series from Bangko Sentral ng Pilipinas

Abstract: This paper studies the response of private sector nominal wage growth to changes in unemployment in the 17 regions of the Philippines during the COVID-19 pandemic. We construct a quarterly regional panel of annual wage growth that controls for changes in worker composition covering Q1 2018 to Q3 2023. Using fixed effects estimation, we find a clear procyclical relationship between regional wage growth and regional unemployment fluctuations during the pandemic. This negative association is both asymmetric—driven mainly by episodes of rising unemployment—and heterogeneous—being strongest among male and less educated wage workers. Such a relationship is absent in the immediate pre- and post-pandemic periods. Our findings underscore the exceptional labor market conditions during the pandemic and show evidence of the pandemic’s uneven labor market impacts.

JEL-codes: E24 O53 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2025-12
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Published as BSP Discussion paper No. 2025-17, December 2025

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