Left for Dead? The Wage Phillips Curve and the Composition of Unemployment

Leonardo Ciambezi
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Leonardo Ciambezi: Université Côte d'Azur, CNRS, GREDEG, France

No 2024-13, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: Anumber of contributions in recent years has documented instability of theWage Phillips Curve in the US and in the Eurozone following the Great Recession. This paper shows that, for the case of France, the dwindling performance of theWage Phillips Curve may be explained by the fact that we have been looking at the "wrong" unemployment. The long-term unemployed exhibit low levels of attachment to the labour market, more similar to those of inactive people than to the rest of the unemployed, and don't have a significant impact on wage growth. A strong negative relationship between wage growth and labour market conditions emerges when the Wage Phillips Curve is estimated by excluding this component of unemployment.

Keywords: Unemployment; Wages; Inflation; Phillips Curve; Business Cycle; Economic Fluctuations (search for similar items in EconPapers)
JEL-codes: E24 E31 E32 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2024-04
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2024-13

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