UZH-Logo

Maintenance Infos

Real earnings and business cycles: new evidence


Hart, Robert A; Malley, James R; Woitek, Ulrich (2008). Real earnings and business cycles: new evidence. Empirical Economics, 37(1):51-71.

Abstract

In the time domain, the observed cyclical behavior of the real wage hides a range of economic influences that give rise to cycles of differing lengths and strengths. This may serve to produce a distorted picture of wage cyclicality. Here, we employ frequency domain methods that allow us to assess the relative contribution of cyclical frequency bands
on real wage earnings. Earnings are decomposed into standard and overtime components. We also distinguish between consumption and production wages. Frequency domain analysis is carried out in relation to wages alone and to wages in relation to output and employment cycles. Our univariate analysis suggests that, in general, the dominant
cycle followed by output, employment, real consumer and producer wages and their components is 5-7 years. Consistent with previous findings reported in the macro-level literature, our bi-variate results show that the various measures of the wage are generally not linked
to the employment cycle. However, and in sharp contrast with previous macro-level studies we find strong procyclical links between the consumer wage and its overtime components and the output cycle, especially at the 5-7 years frequency.

In the time domain, the observed cyclical behavior of the real wage hides a range of economic influences that give rise to cycles of differing lengths and strengths. This may serve to produce a distorted picture of wage cyclicality. Here, we employ frequency domain methods that allow us to assess the relative contribution of cyclical frequency bands
on real wage earnings. Earnings are decomposed into standard and overtime components. We also distinguish between consumption and production wages. Frequency domain analysis is carried out in relation to wages alone and to wages in relation to output and employment cycles. Our univariate analysis suggests that, in general, the dominant
cycle followed by output, employment, real consumer and producer wages and their components is 5-7 years. Consistent with previous findings reported in the macro-level literature, our bi-variate results show that the various measures of the wage are generally not linked
to the employment cycle. However, and in sharp contrast with previous macro-level studies we find strong procyclical links between the consumer wage and its overtime components and the output cycle, especially at the 5-7 years frequency.

Citations

4 citations in Web of Science®
4 citations in Scopus®
Google Scholar™

Altmetrics

Downloads

879 downloads since deposited on 30 Jan 2009
85 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
06 Faculty of Arts > Institute of History
Dewey Decimal Classification:900 History
330 Economics
Language:English
Date:2008
Deposited On:30 Jan 2009 07:29
Last Modified:05 Apr 2016 12:54
Publisher:Springer
ISSN:0377-7332
Additional Information:The original publication is available at www.springerlink.com
Publisher DOI:10.1007/s00181-008-0222-1
Permanent URL: http://doi.org/10.5167/uzh-11615

Download

[img]
Preview
Content: Accepted Version
Filetype: PDF
Size: 1MB
View at publisher

TrendTerms

TrendTerms displays relevant terms of the abstract of this publication and related documents on a map. The terms and their relations were extracted from ZORA using word statistics. Their timelines are taken from ZORA as well. The bubble size of a term is proportional to the number of documents where the term occurs. Red, orange, yellow and green colors are used for terms that occur in the current document; red indicates high interlinkedness of a term with other terms, orange, yellow and green decreasing interlinkedness. Blue is used for terms that have a relation with the terms in this document, but occur in other documents.
You can navigate and zoom the map. Mouse-hovering a term displays its timeline, clicking it yields the associated documents.

Author Collaborations