Evolving wage cyclicality in Latin America

Julian Messina and Luca Gambetti

No 6978, Policy Research Working Paper Series from The World Bank

Abstract: A vector autoregression model with time-varying coefficients is used to examine the evolution of wage cyclicality in four Latin American economies: Brazil, Chile, Colombia and Mexico, during the period 1980-2010. Wages are highly pro-cyclical in all countries up to the mid-1990s except in Chile. Wage cyclicality declines thereafter, especially in Brazil and Colombia. This decline in wage cyclicality is in accordance with declining real-wage flexibility in a low-inflation environment. Controlling for compositional effects caused by changes in labor force participation along the business cycle does not alter these results.

Keywords: Labor Policies; Environmental Economics&Policies; Labor Markets; Youth and Governance; Economic Theory&Research (search for similar items in EconPapers)
Date: 2014-07-01
New Economics Papers: this item is included in nep-lab, nep-lam, nep-lma and nep-mac
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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 (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:6978

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