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Worker flows and wage dynamics: estimating wage growth without composition effects

Juan F Jimeno (), J. Ignacio García Pérez and Raquel Carrasco

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: Wage dynamics is closely intertwined with job flows. However, composition effects associated to the different sizes and characteristics of workers entering/exiting into/from employment that may blur the "true" underlying wage growth, are not typically accounted for. In this paper, we take these composition effects into consideration and compute wage growth in Spain during the2006-2018 period after netting out the consequences of employment dynamics.Our results show that the "true" underlying wage growth in the Spanish economy during recessions (expansions) was, on average, significantly lower (higher) that the observed with raw data. This may help to explain some macro puzzles,such as the "vanishing" Phillips curve.

Keywords: Selection; Bias; Composition; Effects; Wage; Growth (search for similar items in EconPapers)
JEL-codes: J21 J31 J30 (search for similar items in EconPapers)
Date: 2020-12-10
New Economics Papers: this item is included in nep-ltv
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Related works:
Working Paper: Worker Flows and Wage Dynamics: Estimating Wage Growth without Composition Effects (2021) Downloads
Working Paper: Worker Flows and Wage Dynamics: Estimating Wage Growth Without Composition Effects (2020) Downloads
Working Paper: Worker Flows and Wage Dynamics: Estimating Wage Growth without Composition Effects (2020) Downloads
Working Paper: Worker Flows and Wage Dynamics: Estimating Wage Growth without Composition Effects (2020) Downloads
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