Do employers provide insurance against low frequency shocks? Industry employment and industry wages

Paul Devereux

Open Access publications from School of Economics, University College Dublin

Abstract: I use panel data to examine whether long-term changes in industry wages are positively related to long-term changes in industry employment. Previous research using repeated cross-sectional data found no systematic relationship between these variables. Using standard fixed effects models to deal with individual heterogeneity, I find a robust positive relationship between changes in composition-constant industry wages and industry employment. This suggests that growing industries attract less skilled individuals in a manner that biases down the estimated relationship between industry employment and wages in repeated cross-sectional data. The results imply that supply curves facing industries are elastic but upward sloping.

Keywords: Industries; Wages; Employment (Economic theory) (search for similar items in EconPapers)
Pages: 28 pages
Date: 2005
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Citations: View citations in EconPapers (8)

Published in: Journal of Labor Economics, 23(2) 2005

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http://hdl.handle.net/10197/320 Open Access version, 2005 (application/pdf)

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Journal Article: Do Employers Provide Insurance against Low Frequency Shocks? Industry Employment and Industry Wages (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:oapubs:10197/320

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