Wages and Unemployment Across Business Cycles: A High-Frequency Investigation

34 Pages Posted: 22 Mar 2015

See all articles by Lei Fang

Lei Fang

Federal Reserve Bank of Atlanta

Pedro Silos

Federal Reserve Bank of Atlanta

Date Written: October 2012

Abstract

This paper investigates the change in wages associated with a spell of unemployment. The novelty lies in using monthly data from the Survey of Income and Program Participation (SIPP) to analyze the dynamics of those wage changes across different business cycles. The level of education or the sector of re-employment affects the change in wages following an unemployment spell differently across different downturns. The degree of wage rigidity varies across recessions; wage changes pre- and post-unemployment are sometimes procyclical and sometimes countercyclical. These results may be useful for understanding the different aggregate employment dynamics observed across downturns and recoveries.

Keywords: wage rigidity, unemployment duration, jobless recoveries

JEL Classification: E24, J31

Suggested Citation

Fang, Lei and Silos, Pedro, Wages and Unemployment Across Business Cycles: A High-Frequency Investigation (October 2012). FRB Atlanta Working Paper No. 2012-16. Available at SSRN: https://ssrn.com/abstract=2479462 or http://dx.doi.org/10.2139/ssrn.2479462

Lei Fang

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8057 (Phone)

Pedro Silos (Contact Author)

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8630 (Phone)
404-498-8956 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
12
Abstract Views
224
PlumX Metrics