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Workers' Flows and Real Wage Cyclicality

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  • Anabela Carneiro
  • Pedro 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 Banco de Portugal, Economics and Research Department in its series Working Papers with number w200409.

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Date of creation: 2004
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Handle: RePEc:ptu:wpaper:w200409

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Cited by:
  1. Montornès, J. & Sauner-Leroy, J-B., 2010. "Wage-setting Behavior in France: Additional Evidence from an Ad-hoc Survey," Working papers 282, Banque de France.
  2. Ch. Pissarides., 2011. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
  3. Pedro S. Martins, 2007. "Heterogeneity In Real Wage Cyclicality," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(5), pages 684-698, November.
  4. Christopher Pissarides, 2006. "Unemployment and hours of work: the North Atlantic divide revisited," LSE Research Online Documents on Economics 4461, London School of Economics and Political Science, LSE Library.

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