Real Wage Cyclicality of Job Stayers, Within-Company Job Movers, and Between-Company Job Movers

By P. Devereux, R. Hart. Social Science Research Network, 2005

160 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, General Health Professions, Public Administration

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Citations in the corpus

Earnings Returns to the British Education Expansion. (2011, background): “However, our design differs in that they exploit a once-off fall in education for the war-impacted cohorts while we exploit a change in the trend of educational 15 Devereux and Hart (2006) show that wages in Britain are very sensitive to movements in the aggregate unemployment rate.”
Wage Adjustment in the Great Recession and Other Downturns: Evidence from the United States and Great Britain (2016, background): “According to Doris et al. (2014), during Ireland’s Great Recession, which was extraordinarily severe and involved a deflation in prices, the majority of job stayers experienced nominal wage cuts.”
A Behavioral Account of the Labor Market: The Role of Fairness Concerns (2008, background): “Recent studies include (Devereux 2001; Devereux & Hart 2006; Haefke et al 2006; Solon et al 1994).”
The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer? (2009, background): “I assume that z/p¯x =0 .73, as in Hall (2006) and Mortensen and Nagypal (2006), and normalize p =1 , which gives z =0 .365(1 + R). ( 30 )”