Worker Flows and Wage Dynamics: Estimating Wage Growth without Composition Effects

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

No 13942, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 the 2006-2018 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 J30 J31 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020-12
New Economics Papers: this item is included in nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Oxford Economic Papers, 2024, 76 (1), 94–114

Downloads: (external link)
https://docs.iza.org/dp13942.pdf (application/pdf)

Related works:
Journal Article: Worker flows and wage dynamics: estimating wage growth without composition effects (2024)
Working Paper: Worker Flows and Wage Dynamics: Estimating Wage Growth without Composition Effects (2021)
Working Paper: Worker Flows and Wage Dynamics: Estimating Wage Growth Without Composition Effects (2020)
Working Paper: Worker flows and wage dynamics: estimating wage growth without composition effects (2020)
Working Paper: Worker Flows and Wage Dynamics: Estimating Wage Growth without Composition Effects (2020)
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:iza:izadps:dp13942

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().