Evolving Wage Cyclicality in Latin America

Luca Gambetti and Julian Messina

No 7791, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper examines the evolution of the cyclicality of real wages and employment in four Latin American economies (Brazil, Chile, Colombia and Mexico) during the period 1980-2010. Wages are highly pro-cyclical during the 1980s and early 1990s, a period characterized by high inflation. As inflation declined wages became less pro-cyclical, a feature that is consistent with emerging downward wage rigidities in a low-inflation environment. Compositional effects associated with changes in labor participation along the business cycle appear to matter less for estimates of wage cyclicality than in developed economies.

Keywords: employment; labor force; wage flexibility; wage cyclicality (search for similar items in EconPapers)
JEL-codes: E24 (search for similar items in EconPapers)
Date: 2016-08
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Related works:
Journal Article: Evolving Wage Cyclicality in Latin America (2018)
Working Paper: Evolving Wage Cyclicality in Latin America (2017)
Working Paper: Evolving wage cyclicality in Latin America (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:7791

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