IDEAS home Printed from https://ideas.repec.org/p/ucn/oapubs/10197-314.html
   My bibliography  Save this paper

Real wage cyclicality of job stayers, within-company job movers, and between-company job movers

Author

Listed:
  • Robert A. Hart
  • Paul J. Devereux

Abstract

Using the British New Earnings Survey Panel Data for 1975-2001, the authors estimate the wage cyclicality (the degree to which wage levels rise and fall with economic upturns and downturns) of three groups: job stayers, within-company job movers, and between-company job movers. Wages of internal movers, they find, were slightly more procyclical, and wages of external movers considerably more procyclical, than those of stayers. The greater cyclicality of movers' wages is particularly apparent for private sector workers and persons not covered by collective agreements. Nevertheless, because job stayers comprised about 90% of all observations in this large sample of British workers, the procyclicality of their wages was the predominant determinant of the overall procyclical pattern found across all groups. Thus, the analysis does not support the implication of some rigid wage models that employers use job title changes to adjust wages to the business cycle.

Suggested Citation

  • Robert A. Hart & Paul J. Devereux, 2006. "Real wage cyclicality of job stayers, within-company job movers, and between-company job movers," Open Access publications 10197/314, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:oapubs:10197/314
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10197/314
    File Function: Open Access version, 2006
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alison L. Booth & Marco Francesconi & Carlos Garcia-Serrano, 1999. "Job Tenure and Job Mobility in Britain," ILR Review, Cornell University, ILR School, vol. 53(1), pages 43-70, October.
    2. Gary Solon & Robert Barsky & Jonathan A. Parker, 1994. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 1-25.
    3. 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.
    4. Paul J. Devereux & Robert A. Hart, 2007. "The Spot Market Matters: Evidence On Implicit Contracts From Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(5), pages 661-683, November.
    5. Joseph G. Altonji & Paul J. Devereux, 1999. "The Extent and Consequences of Downward Nominal Wage Rigidity," NBER Working Papers 7236, National Bureau of Economic Research, Inc.
    6. Darren Grant, 2003. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from the National Longitudinal Surveys," ILR Review, Cornell University, ILR School, vol. 56(3), pages 393-408, April.
    7. Shin, Donggyun, 1994. "Cyclicality of real wages among young men," Economics Letters, Elsevier, vol. 46(2), pages 137-142, October.
    8. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    9. Stephen Nickell & Glenda Quintini, 2003. "Nominal wage rigidity and the rate of inflation," Economic Journal, Royal Economic Society, vol. 113(490), pages 762-781, October.
    10. Viscusi, W Kip, 1980. "Sex Differences in Worker Quitting," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 388-398, August.
    11. Hashimoto, Masanori, 1979. "Bonus Payments, on-the-Job Training, and Lifetime Employment in Japan," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1086-1104, October.
    12. Malcomson, James M., 1999. "Individual employment contracts," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 35, pages 2291-2372 Elsevier.
    13. Robert A. Hart, 2006. "Worker–Job Matches, Job Mobility and Real Wage Cyclicality," Economica, London School of Economics and Political Science, vol. 73(290), pages 287-298, May.
    14. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
    15. Francine D. Blau & Lawrence M. Kahn, 1981. "Race and Sex Differences in Quits by Young Workers," ILR Review, Cornell University, ILR School, vol. 34(4), pages 563-577, July.
    16. Paul J. Devereux, 2001. "The Cyclicality of Real Wages within Employer-Employee Matches," ILR Review, Cornell University, ILR School, vol. 54(4), pages 835-850, July.
    17. Smith, Jennifer C, 2000. "Nominal Wage Rigidity in the United Kingdom," Economic Journal, Royal Economic Society, vol. 110(462), pages 176-195, March.
    18. Devereux, Paul J, 2000. "Task Assignment over the Business Cycle," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 98-124, January.
    19. 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 666-689, August.
    20. Rosen, Sherwin, 1985. "Implicit Contracts: A Survey," Journal of Economic Literature, American Economic Association, vol. 23(3), pages 1144-1175, September.
    21. James Ted McDonald & Christopher Worswick, 1999. "Wages, Implicit Contracts, and the Business Cycle: Evidence from Canadian Micro Data," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 884-913, August.
    22. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.
    23. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
    24. Robert E. Hall, 1974. "The Process of Inflation in the Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 5(2), pages 343-410.
    25. Beth Anne Wilson, 1997. "Movements of wages over the business cycle: an intra-firm view," Finance and Economics Discussion Series 1997-1, Board of Governors of the Federal Reserve System (U.S.).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anger, Silke, 2007. "The cyclicality of effective wages within employer-employee matches: evidence from German panel data," Working Paper Series 783, European Central Bank.
    2. Anger, Silke, 2011. "The Cyclicality of Effective Wages within Employer–Employee Matches in a Rigid Labor Market," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 18(6), pages 786-797.
    3. Fei Peng & W. Stanley Siebert, 2008. "Real Wage Cyclicality in Italy," LABOUR, CEIS, vol. 22(4), pages 569-591, December.
    4. Fei Peng & Sajid Anwar & Lili Kang, 2020. "Job Movement and Real Wage Flexibility in Eastern and Western Parts of Germany," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(4), pages 764-789, October.
    5. Shin, Donggyun & Shin, Kwanho, 2008. "Why Are The Wages Of Job Stayers Procyclical?," Macroeconomic Dynamics, Cambridge University Press, vol. 12(1), pages 1-21, February.
    6. Hart, Robert A., 2006. "Real Wage Cyclicality of Female Stayers and Movers in Part-Time and Full-Time Jobs," IZA Discussion Papers 2364, Institute of Labor Economics (IZA).
    7. Paul J. Devereux, 2004. "Cyclical Quality Adjustment in the Labor Market," Southern Economic Journal, John Wiley & Sons, vol. 70(3), pages 600-615, January.
    8. Daniel Schäfer & Carl Singleton, 2020. "Nominal Wage Adjustments and the Composition of Pay: New Evidence from Payroll Data," Economics working papers 2020-11, Department of Economics, Johannes Kepler University Linz, Austria.
    9. Kang, Lili & Peng, Fei, 2012. "Selection and Real wage cyclicality: Germany Case," MPRA Paper 42452, University Library of Munich, Germany.
    10. Bauer, Anja & Lochner, Benjamin, 2020. "History dependence in wages and cyclical selection: Evidence from Germany," Labour Economics, Elsevier, vol. 67(C).
    11. Bartolucci, Cristian, 2012. "Business cycles and wage rigidity," Labour Economics, Elsevier, vol. 19(4), pages 568-583.
    12. Christopher A. Pissarides, 2009. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," Econometrica, Econometric Society, vol. 77(5), pages 1339-1369, September.
    13. Jonathan P. Thomas & Tim Worrall, 2007. "Limited Commitment Models Of The Labour Market," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(5), pages 750-773, November.
    14. Paul J. Devereux & Robert A. Hart, 2007. "The Spot Market Matters: Evidence On Implicit Contracts From Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(5), pages 661-683, November.
    15. Shin Donggyun, 2012. "Cyclicality of Real Wages in Korea," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-19, January.
    16. Pedro S. Martins, 2007. "Heterogeneity In Real Wage Cyclicality," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(5), pages 684-698, November.
    17. Anabela Carneiro & Paulo Guimaraes & Pedro Portugal, 2009. "Real Wages and the Business Cycle: Accounting for Worker and Firm Heterogeneity," CEF.UP Working Papers 0903, Universidade do Porto, Faculdade de Economia do Porto.
    18. Pedro Portugal & Anabela Carneiro, 2004. "Workers' Flows and Real Wage Cyclicality," Working Papers w200409, Banco de Portugal, Economics and Research Department.
    19. Lili Kang & Fei Peng, 2017. "Wage flexibility in the Chinese labour market, 1989–2009," Regional Studies, Taylor & Francis Journals, vol. 51(4), pages 616-628, April.
    20. Martins, Pedro S. & Solon, Gary & Thomas, Jonathan P., 2010. "Measuring What Employers Really Do about Entry Wages over the Business Cycle," IZA Discussion Papers 4757, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Real wage cyclicality; Job stayers; Within-company job movers; Between-company job movers; Business cycles; Wages; Labor mobility;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucn:oapubs:10197/314. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nicolas Clifton (email available below). General contact details of provider: https://edirc.repec.org/data/educdie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.