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Real wage cyclicality of job stayers, within-company job movers, and between-company job movers

  • Paul J. Devereux
  • Robert A. Hart

Using the British New Earnings Survey Panel Data for 1975–2001, the authors estimate the wage cyclicality (the degree to which wage levels rise and fall with economic upturns and downturns) of three groups: job stayers, within-company job movers, and between-company job movers. Wages of internal movers, they find, were slightly more procyclical, and wages of external movers considerably more procyclical, than those of stayers. The greater cyclicality of movers’ wages is particularly apparent for private sector workers and persons not covered by collective agreements. Nevertheless, because job stayers comprised about 90% of all observations in this large sample of British workers, the procyclicality of their wages was the predominant determinant of the overall procyclical pattern found across all groups. Thus, the analysis does not support the implication of some rigid wage models that employers use job title changes to adjust wages to the business cycle. (Free full-text download available at

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Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 60 (2006)
Issue (Month): 1 (October)
Pages: 105-119

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Handle: RePEc:ilr:articl:v:60:y:2006:i:1:p:105-119
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  1. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-88, August.
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  6. Solon, Gary & Barsky, Robert & Parker, Jonathan A, 1994. "Measuring the Cyclicality of Real Wages: How Important Is Composition Bias?," The Quarterly Journal of Economics, MIT Press, vol. 109(1), pages 1-25, February.
  7. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
  8. Paul J. Devereux & Robert A. Hart, 2005. "The spot market matters : evidence on implicit contracts from Britain," Open Access publications 10197/741, School of Economics, University College Dublin.
  9. Gary Solon & Warren Whatley & Ann Huff Stevens, 1997. "Wage Changes and Intrafirm Job Mobility over the Business Cycle: Two Case Studies," ILR Review, Cornell University, ILR School, vol. 50(3), pages 402-415, April.
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  11. Sherwin Rosen, 1985. "Implicit Contracts: A Survey," NBER Working Papers 1635, National Bureau of Economic Research, Inc.
  12. Robert E. Hall, 1974. "The Process of Inflation in the Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 5(2), pages 343-410.
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