The wage curve: A panel data view of labour market segments

Pavel Gertler

No WP 3/2010, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: The paper studies the relationship between the local unemployment rate and wage level – commonly referred to as the wage curve. Using a panel data setup for annual enterprise-level microdata, we confirm previous findings that wages in Slovakia are, on the whole, relatively flexible – with a rise in the local unemployment rate of 1 percentage point being associated with a drop in wages of 0.85%. We find, however, that these elasticities differ considerably across sectors, regions and, in particular, skills. Our results indicate that overall wage flexibility in the Slovak labour market is driven more by the wage flexibility of higher-skilled employees, and their broader opportunities for employment, than by the institutional arrangements of the labour market.

Keywords: wage curve; panel data; unemployment elasticity of wages; wage flexibility; Slovakia; Phillips curve; microdata (search for similar items in EconPapers)
JEL-codes: C53 E21 E27 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-12
New Economics Papers: this item is included in nep-lab, nep-mac and nep-tra
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:svk:wpaper:1012

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