Bryson, Alexander;
Blanchflower, David G;
(2024)
The Wage Curve After the Great Recession.
Economica
, 91
(362)
pp. 653-668.
10.1111/ecca.12515.
Preview |
Text
Bryson_Economica - 2024 - Blanchflower - The wage curve after the Great Recession.pdf Download (801kB) | Preview |
Abstract
Most economists maintain that the labour market in the United States (and elsewhere) is ‘tight’ because unemployment rates are low, and the Beveridge Curve (the vacancies-to-unemployment ratio) is high. They infer from this that there is potential for wage-push inflation. However, real wages fell rapidly in 2022 and, prior to that, real wages had been stagnant for some time. We show that unemployment is not key to understanding wage formation in the United States and hasn’t been since the Great Recession. Instead, we show rates of under-employment (the percentage of workers with part-time hours who would prefer more hours) and the rate of inactivity (the percentage of the civilian adult population who are out of the labour force) reduces wage pressure in the United States. This finding holds in panel data with state and year fixed effects in both annual and quarterly data for the period 1980-2022 and is supportive of a wage curve which fits the data much better than a Phillips Curve. The unemployment rate no longer enters significantly negative in wage equations, however specified, in the years since 2008.
| Type: | Article |
|---|---|
| Title: | The Wage Curve After the Great Recession |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1111/ecca.12515 |
| Publisher version: | https://doi.org/10.1111/ecca.12515 |
| Language: | English |
| Additional information: | © 2024 The Authors. Economica published by John Wiley & Sons Ltd on behalf of London School of Economics and Political Science. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. |
| Keywords: | wages, unemployment, economic inactivity, underemployment |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > School of Education UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education > IOE - Social Research Institute |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10169490 |
Archive Staff Only
 |
View Item |
