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Workers’ Flows and Real Wage Cyclicality

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  • Carneiro, Anabela

    ()
    (University of Porto)

  • Portugal, Pedro

    ()
    (Banco de Portugal)

Abstract

This study investigates real wage cyclicality in Portugal for the years of 1986-98, addressing the heterogeneity in wages responses to aggregate labor market conditions for workers’ hirings and separations. The results exhibit a moderate procyclical behavior of real wages for continuously employed workers, in particular, for job stayers. For workers’ accessions a strongly procyclical behavior in wages was observed, which is consistent with the idea that entry wages are much more procyclical than current wages. This empirical evidence suggests that even micro-data estimates of real wage cyclicality may conceal a strong procyclical wage behavior, when heterogeneity on wages responses to aggregate conditions between employed workers and hirings and separations is not taken into account.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2604.

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Length: 51 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2604

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Keywords: wage cyclicality; hirings; separations;

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Citations

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Cited by:
  1. Christopher A. Pissarides, 2006. "Unemployment and Hours of Work: The North Atlantic Divide Revisited," CEP Discussion Papers, Centre for Economic Performance, LSE dp0757, Centre for Economic Performance, LSE.
  2. Montornès, J. & Sauner-Leroy, J-B., 2010. "Wage-setting Behavior in France: Additional Evidence from an Ad-hoc Survey," Working papers, Banque de France 282, Banque de France.
  3. Christopher A. Pissarides, 2009. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," Econometrica, Econometric Society, Econometric Society, vol. 77(5), pages 1339-1369, 09.
  4. Pedro S. Martins, 2007. "Heterogeneity In Real Wage Cyclicality," Scottish Journal of Political Economy, Scottish Economic Society, Scottish Economic Society, vol. 54(5), pages 684-698, November.

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