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Left for Dead? The Wage Phillips Curve and the Composition of Unemployment

Author

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  • Leonardo Ciambezi

    (Université Côte d'Azur, CNRS, GREDEG, France
    Institute of Economics and l'Embeds, Scuola Superiore Sant'Anna, Pisa, Italy)

Abstract

Anumber of contributions in recent years has documented instability of theWage Phillips Curve in the US and in the Eurozone following the Great Recession. This paper shows that, for the case of France, the dwindling performance of theWage Phillips Curve may be explained by the fact that we have been looking at the "wrong" unemployment. The long-term unemployed exhibit low levels of attachment to the labour market, more similar to those of inactive people than to the rest of the unemployed, and don't have a significant impact on wage growth. A strong negative relationship between wage growth and labour market conditions emerges when the Wage Phillips Curve is estimated by excluding this component of unemployment.

Suggested Citation

  • Leonardo Ciambezi, 2024. "Left for Dead? The Wage Phillips Curve and the Composition of Unemployment," GREDEG Working Papers 2024-13, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    • Handle: RePEc:gre:wpaper:2024-13
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    More about this item

    Keywords

    Unemployment; Wages; Inflation; Phillips Curve; Business Cycle; Economic Fluctuations;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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