Do employers provide insurance against low frequency shocks? Industry employment and industry wages

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Title: Do employers provide insurance against low frequency shocks? Industry employment and industry wages
Authors: Devereux, Paul J.
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Date: 2005
Abstract: I use panel data to examine whether long-term changes in industry wages are positively related to long-term changes in industry employment. Previous research using repeated cross-sectional data found no systematic relationship between these variables. Using standard fixed effects models to deal with individual heterogeneity, I find a robust positive relationship between changes in composition-constant industry wages and industry employment. This suggests that growing industries attract less skilled individuals in a manner that biases down the estimated relationship between industry employment and wages in repeated cross-sectional data. The results imply that supply curves facing industries are elastic but upward sloping.
Funding Details: The W.E. Upjohn Institute; The University of California Institute for Labor and Employment
Type of material: Journal Article
Publisher: University of Chicago Press
Copyright (published version): Copyright 2005 by The University of Chicago.
Subject LCSH: Industries
Employment (Economic theory)
Language: en
Status of Item: Peer reviewed
Appears in Collections:Geary Institute Research Collection
Economics Research Collection

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