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Workers' Flows and Real Wage Cyclicality

  • Anabela Carneiro


    (CETE, Faculdade de Economia, Universidade do Porto)

  • Pedro Portugal


    (Banco de Portugal and Universidade Nova de Lisboa)

This study investigates real wage cyclicality in Portugal for the years of 1986-98, adressing 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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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 0402.

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Length: 49 pages
Date of creation: May 2004
Date of revision:
Handle: RePEc:por:cetedp:0402
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  29. Darren Grant, 2001. "A Comparison of the Cyclical Behavior of Union and Nonunion Wages in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 31-57.
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