What's Up with U.S. Wage Growth and Job Mobility?

June 28, 2016

Preview Citation

Format: Chicago

Stephan Danninger. What's Up with U.S. Wage Growth and Job Mobility?, (USA: International Monetary Fund, 2016) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Since the global financial crisis, US wage growth has been sluggish. Drawing on individual earnings data from the 2000–15 Current Population Survey, I find that the drawn-out cyclical labor market repair—likely owing to low entry wages of new workers—slowed down real wage growth. There are, however, also signs of structural changes in the labor market affecting wages: for full-time, full-employed workers, the Wage-Phillips curve—the empirical relationship between wage growth and the unemployment rate—has become horizontal after 2008. Similarly, job-turnover rates have continued to decline. Job-to-job transitions—associated with higher wage growth—have slowed across all skill and age groups and beyond what local labor market conditions would imply. This raises concerns about the allocative ability of the labor market to adjust to changing economic conditions.

Subject: Employment, Labor, Labor markets, Unemployment rate, Wages

Keywords: Composition wage, Employment, Global, Growth elasticity, Job Turnover, Labor market, Labor markets, Regression model, Unemployment rate, Wage, Wage contract, Wage growth, Wage ladder, Wage rate, Wage recovery, Wage-growth-Phillips curve, Wages, Worker, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/122
Stock No:

WPIEA2016122
ISBN:

9781498335232
ISSN:

1018-5941

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