New Evidence on Real Wage Cyclicality within Employer-Employee Matches
In the most thorough study to date on wage cyclicality among job stayers, Devereux%u2019s (2001) analysis of men in the Panel Study of Income Dynamics produced two puzzling findings: (1) the real wages of salaried workers are noncyclical, and (2) wage cyclicality among hourly workers differs between two alternative wage measures. We examine these puzzles with additional evidence from other sources. Devereux%u2019s finding of noncyclical real wages among salaried job stayers is not replicated in the National Longitudinal Survey of Youth data. The NLSY data, however, do corroborate his finding of a discrepancy for hourly workers between the cyclicality of the two alternative wage measures. Evidence from the PSID Validation Study contradicts Devereux%u2019s conjecture that the discrepancy might be due to a procyclical bias from measurement error in average hourly earnings. Evidence from the Bureau of Labor Statistics establishment survey supports his hypothesis that overtime work accounts for part (but not all) of the discrepancy. We conclude that job stayers%u2019 real average hourly earnings are substantially procyclical and that an important portion of that procyclicality probably is due to compensation beyond base wages.
|Date of creation:||May 2006|
|Date of revision:|
|Publication status:||published as Donggyun Shin & Gary Solon, 2007. "New Evidence On Real Wage Cyclicality Within Employer-Employee Matches," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(5), pages 648-660, November.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert B. Barsky & Gary Solon, 1989. "Real Wages Over The Business Cycle," NBER Working Papers 2888, National Bureau of Economic Research, Inc.
- Donggyun Shin & Kwanho Shin, 2003.
"Why Are The Wages of Job Stayers Procyclical?,"
ISER Discussion Paper
0573, Institute of Social and Economic Research, Osaka University.
- Bound, John & Krueger, Alan B, 1991.
"The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?,"
Journal of Labor Economics,
University of Chicago Press, vol. 9(1), pages 1-24, January.
- John Bound & Alan B. Krueger, 1989. "The Extent of Measurement Error In Longitudinal Earnings Data: Do Two Wrongs Make A Right?," NBER Working Papers 2885, National Bureau of Economic Research, Inc.
- Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-89, August.
- Paul J. Devereux, 2001.
"The Cyclicality of Real Wages within Employer-Employee Matches,"
Cornell University, ILR School, vol. 54(4), pages 835-850, July.
- Paul J. Devereux, 2001. "The cyclicality of real wages within employer-employee matches," Open Access publications 10197/312, School of Economics, University College Dublin.
- 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.
- Brown, James N & Light, Audrey, 1992. "Interpreting Panel Data on Job Tenure," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 219-57, July.
- Bonggeun Kim & Gary Solon, 2005. "Implications of Mean-Reverting Measurement Error for Longitudinal Studies of Wages and Employment," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 193-196, February.
- Gary Solon & Robert Barsky & Jonathan A. Parker, 1994.
"Measuring the Cyclicality of Real Wages: How Important is Composition Bias?,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 109(1), pages 1-25.
- Gary Solon & Robert Barsky & Jonathan A. Parker, 1992. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias," NBER Working Papers 4202, National Bureau of Economic Research, Inc.
- Mayshar, Joram & Solon, Gary, 1993. "Shift Work and the Business Cycle," American Economic Review, American Economic Association, vol. 83(2), pages 224-28, May.
- Shin, Donggyun, 2000. "Gender and Industry Differences in Employment Cyclicality: Evidence Over the Postwar Period," Economic Inquiry, Western Economic Association International, vol. 38(4), pages 641-50, October.
- Shin, Donggyun, 1994. "Cyclicality of real wages among young men," Economics Letters, Elsevier, vol. 46(2), pages 137-142, October.
- Dickins, William T, 1990. "Error Components in Grouped Data: Is It Ever Worth Weighting?," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 328-33, May.
- Amemiya, Takeshi, 1978. "A Note on a Random Coefficients Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 793-96, October.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:12262. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.