NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Employment versus Wage Adjustment and the US Dollar

Jose Manuel Campa, Linda S. Goldberg

NBER Working Paper No. 6749
Issued in October 1998
NBER Program(s):   IFM

Using two decades of annual data, we explore the links between real exchange rates and employment, wages and overtime activity in specific U.S. manufacturing industries. Across two-digit industry levels of aggregation, exchange rate movements do not have large effects on numbers of jobs or on hours worked. More substantial effects are picked up in industry wages, especially for industries characterized by low price-over-cost markup ratios, and in overtime wages and overtime employment. The industry-by-industry pattern of wage responsiveness is not strongly related to industry export orientation or changes in overall external orientation. Industries with low price-over-cost markups and those with a less skilled workforce exhibit relatively larger employment elasticities but lower wage elasticities.

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Document Object Identifier (DOI): 10.3386/w6749

Published: Review of Economics and Statistics August 2001, Vol. 83, No. 3, Pages 477-489: 477-489. citation courtesy of

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