NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Wage Curve Reloaded

David G. Blanchflower, Andrew J. Oswald

NBER Working Paper No. 11338
Issued in May 2005
NBER Program(s):   LS

This paper provides evidence for the existence of a wage curve -- a micro-econometric association between the level of pay and the local unemployment rate -- in modern U.S. data. Consistent with recent evidence from more than 40 other countries, the wage curve in the United States has a long-run elasticity of approximately -0.1. In line with the paper's theoretical framework: (i) wages are higher in states with more generous unemployment benefits, (ii) the perceived probability of job-finding is lower in states with higher unemployment, and (iii) employees are less happy in states that have higher unemployment. We conclude that it is reasonable to view the wage curve as an empirical law of economics.

download in pdf format
   (264 K)

email paper

This paper is available as PDF (264 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w11338

Users who downloaded this paper also downloaded these:
Blanchflower and Oswald w3181 The Wage Curve
Blanchflower and Oswald w4770 Estimating a Wage Curve for Britain 1973-1990
Blanchflower and Oswald International Wage Curves
Blanchard and Katz w6924 Wage Dynamics: Reconciling Theory and Evidence
Gali w15758 The Return of the Wage Phillips Curve
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us