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Wage Phillips Curve of a Large Emerging Economy: Role of Structural Heterogeneity

Author

Listed:
  • Behera, Harendra
  • Mazumder, Debojyoti
  • ., Kaustubh

Abstract

The paper finds the role of dynamic structural heterogeneity in establishing the empirical existence and convexity of the wage Phillips curve for large emerging economies. Using Indian state-level data, we find a negative and convex relationship between earnings growth and unemployment after controlling for structural labour market factors that vary over time and across states. The fixed effects regression model suggests that a higher speed of formalization makes the wage-Phillips curve flatter, controlling for changes in the composition of labour supply and skilling.

Suggested Citation

  • Behera, Harendra & Mazumder, Debojyoti & ., Kaustubh, 2025. "Wage Phillips Curve of a Large Emerging Economy: Role of Structural Heterogeneity," MPRA Paper 124647, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:124647
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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