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Wage Growth and Labor Market Slack during the COVID-19 Pandemic: Evidence from Philippine Regions

Author

Listed:
  • John Paul P. Corpus

    (Bangko Sentral ng Pilipinas)

  • Ma. Christina F. Epetia

    (Bangko Sentral ng Pilipinas)

  • Margarita Debuque-Gonzales

    (Bangko Sentral ng Pilipinas)

Abstract

This paper studies the response of private sector nominal wage growth to changes in unemployment in the 17 regions of the Philippines during the COVID-19 pandemic. We construct a quarterly regional panel of annual wage growth that controls for changes in worker composition covering Q1 2018 to Q3 2023. Using fixed effects estimation, we find a clear procyclical relationship between regional wage growth and regional unemployment fluctuations during the pandemic. This negative association is both asymmetric—driven mainly by episodes of rising unemployment—and heterogeneous—being strongest among male and less educated wage workers. Such a relationship is absent in the immediate pre- and post-pandemic periods. Our findings underscore the exceptional labor market conditions during the pandemic and show evidence of the pandemic’s uneven labor market impacts.

Suggested Citation

  • John Paul P. Corpus & Ma. Christina F. Epetia & Margarita Debuque-Gonzales, 2025. "Wage Growth and Labor Market Slack during the COVID-19 Pandemic: Evidence from Philippine Regions," BSP Discussion Paper Series 202517, Bangko Sentral ng Pilipinas.
    • Handle: RePEc:bhd:dpaper:202517
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    File URL: https://www.bsp.gov.ph/Sites/researchsite/Publications/BSP-Discussion-Papers/DP202517.pdf
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    More about this item

    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
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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