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Reconciling the divergence in aggregate U.S. wage series

Author

Listed:
  • Julien Champagne

    (Bank of Canada)

  • André Kurmann

    (Drexel University)

  • Jay Stewart

    (Bureau of Labor Statistics)

Abstract

According to data from the Labor Productivity and Costs (LPC) program, average hourly real compensation in the United States has grown consistently over time and become markedly more volatile since the mid-1980s. By contrast, data from the Current Employment Statistics (CES) imply that average hourly real earnings has mostly stagnated and become substantially less volatile. We show that differences in earnings concept and differences in worker coverage account for the majority of this divergence in growth and volatility. The results have important implications for the appropriate choice of aggregate wage series for macroeconomic analysis.

Suggested Citation

  • Julien Champagne & André Kurmann & Jay Stewart, 2015. "Reconciling the divergence in aggregate U.S. wage series," School of Economics Working Paper Series 2015-7, LeBow College of Business, Drexel University.
    • Handle: RePEc:ris:drxlwp:2015_007
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    5. Hahn, Joyce K. & Hyatt, Henry R. & Janicki, Hubert P., 2021. "Job ladders and growth in earnings, hours, and wages," European Economic Review, Elsevier, vol. 133(C).
    6. Henry R. Hyatt & Tucker S. McElroy, 2019. "Labor Reallocation, Employment, and Earnings: Vector Autoregression Evidence," LABOUR, CEIS, vol. 33(4), pages 463-487, December.
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    Keywords

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    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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