American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Wage Posting and Business Cycles
American Economic Review
vol. 106,
no. 5, May 2016
(pp. 208–13)
Abstract
The canonical model of job search and wage posting (Burdett and Mortensen, 1998) establishes a natural connection between the average wage growth in the economy and the pace of Employer-to-Employer (EE) transitions, predicting wage growth to be positively related to the pace of EE reallocation for all workers, but especially for stayers. We verify this empirically both with aggregate time series and with longitudinal micro data from the Survey of Income and Program Participation (SIPP). We argue that monetary authorities concerned with inflationary wage pressure should pay more attention directly to EE reallocation and less to the unemployment rate.Citation
Moscarini, Giuseppe, and Fabien Postel-Vinay. 2016. "Wage Posting and Business Cycles." American Economic Review, 106 (5): 208–13. DOI: 10.1257/aer.p20161051Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E31 Price Level; Inflation; Deflation
- E32 Business Fluctuations; Cycles
- J31 Wage Level and Structure; Wage Differentials
- J64 Unemployment: Models, Duration, Incidence, and Job Search