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The Relative Power of Employment-to-Employment Reallocation and Unemployment Exits in Predicting Wage Growth

Postel-Vinay, F; Moscarini, G; (2017) The Relative Power of Employment-to-Employment Reallocation and Unemployment Exits in Predicting Wage Growth. American Economic Review , 107 (5) pp. 364-368. 10.1257/aer.p20171078. Green open access

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Abstract

We study the cyclical comovement nominal wage growth (either monthly earnings or hourly wage rate) and labor market flows. We use microdata from the Survey of Income and Program Participation over 1996-2013 to purge composition effects in worker and job characteristics and to isolate the reallocative effect of Employer-to-Employer (EE) transitions. We find an "EE wage Phillips curve": wage inflation comoves positively with EE as strongly as with the employment rate. This correlation holds for job stayers; we interpret the EE rate as a measure of labor demand. We find no analogous evidence for the job-finding rate from unemployment.

Type: Article
Title: The Relative Power of Employment-to-Employment Reallocation and Unemployment Exits in Predicting Wage Growth
Event: 2017 ASSA Annual Meeting
Location: Chicago, Illinois, United States
Dates: 06 January 2017 - 08 January 2017
Open access status: An open access version is available from UCL Discovery
DOI: 10.1257/aer.p20171078
Publisher version: http://dx.doi.org/10.1257/aer.p20171078
Language: English
Additional information: This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/1538766
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