An empirical analysis of state labor markets: Has worker insecurity shifted wages in the 1990s

Mark D. Partridge, Douglas R. Dalenberg

Research output: Contribution to journalArticlepeer-review

Abstract

Labor markets in the 1990s have tightened considerably but with a surprising lack of wage inflation. There are several explanations for this behavior, where one of the more prominent explanations is that worker insecurities have depressed wage growth. This study develops an augmented Phillips curve model to test whether there are any structural shifts in wage dynamics in the 1990s. Using state data from 1980 to 1996, the empirical results are consistent with wages becoming more cyclically responsive in the 1990s. Increased long-term unemployment and permanent job losses are associated with the depressed wages in the 1990s, supporting claims that worker insecurity has dampened wage growth.

Original languageEnglish
Pages (from-to)303-323
Number of pages21
JournalQuarterly Review of Economics and Finance
Volume40
Issue number3
DOIs
StatePublished - 2000

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