The Roles of Job and Worker Restructuring in Aggregate Wage Growth Dynamics

20 Pages Posted: 12 Feb 2019

See all articles by Antti Kauhanen

Antti Kauhanen

ETLA, Research Institute of the Finnish Economy

Mika Maliranta

ETLA, The Research Institute of the Finnish Economy

Date Written: March 2019

Abstract

We propose an approach for measuring and analyzing the dynamics of the standard aggregate wage growth of macro statistics with micro data. Our method decomposes the aggregate wage growth into the wage growth of job stayers and into various terms related to job and worker restructuring. This method produces explicit expressions with clear interpretations for the various restructuring components. Using comprehensive longitudinal employer–employee data, we study how job and worker restructuring influence the aggregate wage growth and its cyclicality. The results highlight the importance of drawing a sharp distinction between job and worker restructuring in the analysis of aggregate wage growth dynamics.

Keywords: business cycles, index theory, linked employer–employee data, restructuring, statistical decomposition

Suggested Citation

Kauhanen, Antti and Maliranta, Mika, The Roles of Job and Worker Restructuring in Aggregate Wage Growth Dynamics (March 2019). Review of Income and Wealth, Vol. 65, Issue 1, pp. 99-118, 2019. Available at SSRN: https://ssrn.com/abstract=3332590 or http://dx.doi.org/10.1111/roiw.12315

Antti Kauhanen (Contact Author)

ETLA, Research Institute of the Finnish Economy ( email )

Arkadiankatu 21B
Helsinki, 00100
Finland

HOME PAGE: http://staff.etla.fi/kauhanen/

Mika Maliranta

ETLA, The Research Institute of the Finnish Economy ( email )

Lonnrotink. 4 B
FIN-00120 Helsinki, 00120
Finland
+358 9 609900 (Phone)
+358 9 601753 (Fax)

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