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The wage curve across the wealth distribution

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  • Iacono, Roberto
  • Ranaldi, Marco

Abstract

This paper studies the relationship between wages and the unemployment rate across the wealth distribution. Using microdata from Norway covering the entire population of residents between 2000 and 2015, we introduce four novel findings on this relationship. First, the share of unemployed individuals belonging to the bottom decile of the gross wealth distribution is tenfold larger than that belonging to the top decile (34% and 3.2%, respectively). Second, the share of unemployed individuals belonging to the bottom decile of the gross wealth distribution moves in the opposite manner to that of the top decile. Third, the negative slope of the wage curve is confirmed. Fourth, the wage-to-unemployment ratio increases monotonically with gross wealth.

Suggested Citation

  • Iacono, Roberto & Ranaldi, Marco, 2020. "The wage curve across the wealth distribution," Economics Letters, Elsevier, vol. 196(C).
    • Handle: RePEc:eee:ecolet:v:196:y:2020:i:c:s0165176520303505
    DOI: 10.1016/j.econlet.2020.109580
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    References listed on IDEAS

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    1. Víctor M. Montuenga‐Gómez & José M. Ramos‐Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.
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    6. Andreas Fagereng & Luigi Guiso & Davide Malacrino & Luigi Pistaferri, 2020. "Heterogeneity and Persistence in Returns to Wealth," Econometrica, Econometric Society, vol. 88(1), pages 115-170, January.
    7. Ragnar Nymoen, 2017. "Between Institutions and Global Forces: Norwegian Wage Formation Since Industrialisation," Econometrics, MDPI, vol. 5(1), pages 1-54, January.
    8. Campbell, Carl & Orszag, J. Michael, 1998. "A model of the wage curve," Economics Letters, Elsevier, vol. 59(1), pages 119-125, April.
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    Cited by:

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    3. David Blanchflower & Alex Bryson & Jackson Spurling, 2024. "The wage curve after the Great Recession," Economica, London School of Economics and Political Science, vol. 91(362), pages 653-668, April.

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    More about this item

    Keywords

    Wage curve; Wealth distribution; Norway;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

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