The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from the National Longitudinal Surveys

ILR Review ◽  
2003 ◽  
Vol 56 (3) ◽  
pp. 393 ◽  
Author(s):  
Darren Grant
ILR Review ◽  
2003 ◽  
Vol 56 (3) ◽  
pp. 393-408 ◽  
Author(s):  
Darren Grant

A 1991 study by Paul Beaudry and John DiNardo found evidence of internal labor markets that augment incumbent workers' wages when the external labor market is tight (when unemployment is low) and shield their wages when it is slack. Current wages, they found, depend on the tightest labor market conditions observed since a worker was hired, not current labor market tightness or labor market tightness at the time of hiring. This paper replicates and extends that research using data from six cohorts of the National Longitudinal Surveys that together span more than three decades, as well as an estimation framework more robust than that in the original study. The author finds strong support for Beaudry and DiNardo's key prediction. Supplementary regressions confirm other implications of the theory as well. Recently, at least, the effect of implicit contracting on wages has been similar for men and women.


CFA Digest ◽  
2005 ◽  
Vol 35 (2) ◽  
pp. 42-43
Author(s):  
Daniel B. Cashion

2017 ◽  
Vol 3 (5) ◽  
pp. 32
Author(s):  
Pablo Mejía-Reyes

This paper aims to document expansions and recessions characteristics for 17 states of Mexico over the period 1993-2006 by using a classical business cycle approach. We use the manufacturing production index for each state as the business cycle indicator since it is the only output measure available on a monthly basis. According to this approach, we analyse asymmetries in mean, volatility and duration as well as synchronisation over the business cycle regimes (expansions and recessions) for each case. Our results indicate that recessions are less persistent and more volatile (in general) than expansions in most Mexican states; yet, there is no clear cut evidence on mean asymmetries. In turn, there seems to be strong links between the business cycle regimes within the Northern and Central regions of the country and between states with similar industrialisation patterns, although it is difficult to claim that a national business cycle exists.


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