The cyclicality of real wages within employer-employee matches

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Title: The cyclicality of real wages within employer-employee matches
Authors: Devereux, Paul J.
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Date: Jul-2001
Abstract: Using data from the Panel Study of Income Dynamics, the author examines the cyclicality of wages within employer-employee matches for the years 1970-91. Recent research on wage cyclicality has suggested that wages are very procyclical (tending to rise and fall with economic upturns and downturns), even for workers who remain with the same employer. The author finds, however, that the evidence for wage procyclicality within the matches he examines is rather weak except for the small group of workers who were paid by piece rate or commissions. Despite having acyclical wage rates, men who were paid hourly had earnings movements that were very procyclical. Salaries exhibited little cyclicality, but salaried workers who had income sources from bonuses, commissions, or overtime had procyclical earnings. The results suggest that the increasing prevalence of incentive-based pay will increase the procyclicality of wages within matches.
Type of material: Journal Article
Publisher: Cornell University, School of Industrial & Labor Relations
Journal: Industrial and Labor Relations Review
Volume: 54
Issue: 4
Start page: 835
End page: 850
Copyright (published version): Copyright by Cornell University
Subject LCSH: Wages
Business cycles
Personnel management
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Language: en
Status of Item: Peer reviewed
Appears in Collections:Geary Institute Research Collection
Economics Research Collection

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