TY - JOUR
T1 - Evolving wage cyclicality in Latin America
AU - Gambetti, Luca
AU - Messina, Julián
PY - 2018/1/1
Y1 - 2018/1/1
N2 - © The Author(s) 2018. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. This paper examines the evolution of the cyclicality of real wages and employment in four Latin American economies, Brazil, Chile, Colombia, and Mexico, during the period 1980-2010.Wages were highly procyclical during the 1980s and early 1990s, a period characterized by high inflation. As inflation declined wages became less procyclical, a feature that is consistent with emerging downward wage rigidities in a low inflation environment. Compositional effects associated with changes in labor participation along the business cycle appear to matter less for estimates of wage cyclicality than in developed economies.
AB - © The Author(s) 2018. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. This paper examines the evolution of the cyclicality of real wages and employment in four Latin American economies, Brazil, Chile, Colombia, and Mexico, during the period 1980-2010.Wages were highly procyclical during the 1980s and early 1990s, a period characterized by high inflation. As inflation declined wages became less procyclical, a feature that is consistent with emerging downward wage rigidities in a low inflation environment. Compositional effects associated with changes in labor participation along the business cycle appear to matter less for estimates of wage cyclicality than in developed economies.
KW - Bayesian estimation
KW - Downward wage rigidity
KW - Indexation
KW - Real wage cyclicality
KW - Time varying coefficients
KW - Vector autoregression
U2 - 10.1093/wber/lhw046
DO - 10.1093/wber/lhw046
M3 - Article
SN - 0258-6770
VL - 32
SP - 709
EP - 726
JO - World Bank Economic Review
JF - World Bank Economic Review
ER -