American Economic Review Vol. 107 No. 5 2017

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

Giuseppe Moscarini¹; Fabien Postel–Vinay²

¹ Department of Economics, Yale University, PO Box 208268, New Haven, CT 06520 and NBER (e-mail: ) · ² Department of Economics, University College London, Drayton House, 30 Gordon Street, London WC1H 0AX, UK, and IFS (e-mail: )

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.

DOI

10.1257/aer.p20171078

Volume

107

Issue

5

Pages

364-368

Language

en

Sources

openalex crossref

Cite

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