Evolving Wage Cyclicality in Latin America

A vector autoregression model with time-varying coefficients is used to examine the evolution of wage cyclicality in four Latin American economies: Brazil, Chile, Colombia and Mexico, during the period 1980-2010. Wages are highly pro-cyclical in al...

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Main Authors:	Messina, Julian, Gambetti, Luca
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014
Subjects:	ACCOUNTING AUTOREGRESSION BUSINESS CYCLE BUSINESS CYCLES CENTRAL BANK CENTRAL BANKS COMPARATIVE ANALYSIS CONSUMER PRICE INDEX CPI DEBT DEBT CRISIS DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOWNWARD BIAS ECONOMIC DYNAMICS ECONOMICS ELASTICITY EMPLOYEE EMPLOYMENT MEASURE EMPLOYMENT RATES EMPLOYMENT RELATIONSHIP ENVIRONMENTS ESTIMATED PROBABILITY GDP GROWTH RATE HUMAN CAPITAL INCOME INDEXATION INFORMAL EMPLOYMENT INNOVATION INNOVATIONS INTEREST RATES LABOR CONTRACTS LABOR COSTS LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKETS LABOR REALLOCATION LABOUR MACROECONOMIC STABILIZATION MACROECONOMICS MANUFACTURING WAGES MONETARY POLICY NOMINAL WAGES POLITICAL ECONOMY PRIVATE SECTOR PUBLIC SECTOR WORKERS REAL WAGE REAL WAGES RECESSION TROUGH UNEMPLOYMENT VEC WAGE ADJUSTMENT WAGE DATA WAGE FLEXIBILITY WAGE GAINS WAGE RIGIDITIES WAGE RIGIDITY WAGES WORK FORCE WORKER WORKERS
Online Access:	http://documents.worldbank.org/curated/en/2014/07/19881767/evolving-wage-cyclicality-latin-america http://hdl.handle.net/10986/19346

id	okr-10986-19346
recordtype	oai_dc
spelling	okr-10986-193462021-04-23T14:03:51Z Evolving Wage Cyclicality in Latin America Messina, Julian Gambetti, Luca ACCOUNTING AUTOREGRESSION BUSINESS CYCLE BUSINESS CYCLES CENTRAL BANK CENTRAL BANKS COMPARATIVE ANALYSIS CONSUMER PRICE INDEX CPI DEBT DEBT CRISIS DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOWNWARD BIAS ECONOMIC DYNAMICS ECONOMICS ELASTICITY EMPLOYEE EMPLOYMENT MEASURE EMPLOYMENT RATES EMPLOYMENT RELATIONSHIP ENVIRONMENTS ESTIMATED PROBABILITY GDP GROWTH RATE HUMAN CAPITAL INCOME INDEXATION INFORMAL EMPLOYMENT INNOVATION INNOVATIONS INTEREST RATES LABOR CONTRACTS LABOR COSTS LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKETS LABOR REALLOCATION LABOUR MACROECONOMIC STABILIZATION MACROECONOMICS MANUFACTURING WAGES MONETARY POLICY NOMINAL WAGES POLITICAL ECONOMY PRIVATE SECTOR PUBLIC SECTOR WORKERS REAL WAGE REAL WAGES RECESSION TROUGH UNEMPLOYMENT VEC WAGE ADJUSTMENT WAGE DATA WAGE FLEXIBILITY WAGE GAINS WAGE RIGIDITIES WAGE RIGIDITY WAGES WORK FORCE WORKER WORKERS A vector autoregression model with time-varying coefficients is used to examine the evolution of wage cyclicality in four Latin American economies: Brazil, Chile, Colombia and Mexico, during the period 1980-2010. Wages are highly pro-cyclical in all countries up to the mid-1990s except in Chile. Wage cyclicality declines thereafter, especially in Brazil and Colombia. This decline in wage cyclicality is in accordance with declining real-wage flexibility in a low-inflation environment. Controlling for compositional effects caused by changes in labor force participation along the business cycle does not alter these results. 2014-08-15T14:33:41Z 2014-08-15T14:33:41Z 2014-07 http://documents.worldbank.org/curated/en/2014/07/19881767/evolving-wage-cyclicality-latin-america http://hdl.handle.net/10986/19346 English en_US Policy Research Working Paper;No. 6978 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING AUTOREGRESSION BUSINESS CYCLE BUSINESS CYCLES CENTRAL BANK CENTRAL BANKS COMPARATIVE ANALYSIS CONSUMER PRICE INDEX CPI DEBT DEBT CRISIS DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOWNWARD BIAS ECONOMIC DYNAMICS ECONOMICS ELASTICITY EMPLOYEE EMPLOYMENT MEASURE EMPLOYMENT RATES EMPLOYMENT RELATIONSHIP ENVIRONMENTS ESTIMATED PROBABILITY GDP GROWTH RATE HUMAN CAPITAL INCOME INDEXATION INFORMAL EMPLOYMENT INNOVATION INNOVATIONS INTEREST RATES LABOR CONTRACTS LABOR COSTS LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKETS LABOR REALLOCATION LABOUR MACROECONOMIC STABILIZATION MACROECONOMICS MANUFACTURING WAGES MONETARY POLICY NOMINAL WAGES POLITICAL ECONOMY PRIVATE SECTOR PUBLIC SECTOR WORKERS REAL WAGE REAL WAGES RECESSION TROUGH UNEMPLOYMENT VEC WAGE ADJUSTMENT WAGE DATA WAGE FLEXIBILITY WAGE GAINS WAGE RIGIDITIES WAGE RIGIDITY WAGES WORK FORCE WORKER WORKERS
spellingShingle	ACCOUNTING AUTOREGRESSION BUSINESS CYCLE BUSINESS CYCLES CENTRAL BANK CENTRAL BANKS COMPARATIVE ANALYSIS CONSUMER PRICE INDEX CPI DEBT DEBT CRISIS DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOWNWARD BIAS ECONOMIC DYNAMICS ECONOMICS ELASTICITY EMPLOYEE EMPLOYMENT MEASURE EMPLOYMENT RATES EMPLOYMENT RELATIONSHIP ENVIRONMENTS ESTIMATED PROBABILITY GDP GROWTH RATE HUMAN CAPITAL INCOME INDEXATION INFORMAL EMPLOYMENT INNOVATION INNOVATIONS INTEREST RATES LABOR CONTRACTS LABOR COSTS LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKETS LABOR REALLOCATION LABOUR MACROECONOMIC STABILIZATION MACROECONOMICS MANUFACTURING WAGES MONETARY POLICY NOMINAL WAGES POLITICAL ECONOMY PRIVATE SECTOR PUBLIC SECTOR WORKERS REAL WAGE REAL WAGES RECESSION TROUGH UNEMPLOYMENT VEC WAGE ADJUSTMENT WAGE DATA WAGE FLEXIBILITY WAGE GAINS WAGE RIGIDITIES WAGE RIGIDITY WAGES WORK FORCE WORKER WORKERS Messina, Julian Gambetti, Luca Evolving Wage Cyclicality in Latin America
geographic_facet	Latin America & Caribbean
relation	Policy Research Working Paper;No. 6978
description	A vector autoregression model with time-varying coefficients is used to examine the evolution of wage cyclicality in four Latin American economies: Brazil, Chile, Colombia and Mexico, during the period 1980-2010. Wages are highly pro-cyclical in all countries up to the mid-1990s except in Chile. Wage cyclicality declines thereafter, especially in Brazil and Colombia. This decline in wage cyclicality is in accordance with declining real-wage flexibility in a low-inflation environment. Controlling for compositional effects caused by changes in labor force participation along the business cycle does not alter these results.
format	Publications & Research :: Policy Research Working Paper
author	Messina, Julian Gambetti, Luca
author_facet	Messina, Julian Gambetti, Luca
author_sort	Messina, Julian
title	Evolving Wage Cyclicality in Latin America
title_short	Evolving Wage Cyclicality in Latin America
title_full	Evolving Wage Cyclicality in Latin America
title_fullStr	Evolving Wage Cyclicality in Latin America
title_full_unstemmed	Evolving Wage Cyclicality in Latin America
title_sort	evolving wage cyclicality in latin america
publisher	World Bank Group, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/07/19881767/evolving-wage-cyclicality-latin-america http://hdl.handle.net/10986/19346
_version_	1764443788364742656

Evolving Wage Cyclicality in Latin America

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