Wage Dynamics in the 21st Century
Per-capita national income in the U.S. has risen substantially since the late 1970s, and while there have been significant wage increases for high-skill workers, the real earnings of the median worker have declined. Recently, there have been puzzling macroeconomic trends in wage dynamics. Periods with record low levels of unemployment in the late 2010s have coincided with very little growth in real wages, an apparent contradiction of the long-standing Phillips curve analysis that suggests a negative relationship between unemployment and wage growth. There is no consensus about the magnitude of the slowdown in real wage growth or the relative importance of the different explanations. However, whether real wages are growing and, if so, for whom is fundamental to our understanding of social mobility and a range of other microeconomic and macroeconomic issues. These issues, which were important during a time of employment growth for most of the last decade, take on increased importance as the economy navigates the sharp rise in joblessness and related labor market disruptions associated with the COVID-19 pandemic. Whether wage dynamics as the economy re-opens reflect continuation of pre-pandemic trends, and if they do not, what factors underlie the changes, is an important emerging issue.
To promote research on these issues, the National Bureau of Economic Research (NBER), with the generous support of the Smith Richardson Foundation, has launched a research project on “Wage Dynamics in the 21st Century.” The project is being co-directed by NBER researchers Erik Hurst (University of Chicago) and Lisa Kahn (University of Rochester). The project hosted an initial virtual conference in May 2021, and will host a second in-person conference on September 16-17, 2022.
The meeting will bring together researchers in various subfields of economics, including labor, macroeconomics, public economics and industrial organization to better understand the evolution of wages during the 21st Century. There will also be a virtual pre-conference for all participating authors in May 2022, designed to share progress and provide feedback on the selected papers.
Examples of questions that might be addressed in papers at the upcoming conference include, but are not limited to:
• How have fringe benefits changed over time and how have these changes affected trends in total compensation, relative to real wage stagnation?
• How is declining labor force participation over the last 40 years and over the business cycle related to the stagnation of aggregate wage growth?
• How does the choice of price index impact trends in real wage growth?
• How have labor demand changes driven by technological change and trade impacted trends in aggregate wage growth?
• How have declining unionization rates and changes in firm-level market power impacted wage growth?
• How are life-cycle wage trajectories, in particular declining job mobility and flattening of age-earnings profiles for some groups, related to aggregate wage growth?
• To what extent can stagnating aggregate wage growth explain declining labor force participation rates for some groups, declining rates of family formation, and the increase in opioid use and deaths of despair?
• How do stagnating wages relate to general wage inequality and increased polarization within cities?
• How are stagnating wages related to the seeming flattening of the Phillips Curve?
The co-organizers welcome the submission of both theoretical and empirical research papers on these and other related topics. Submissions from scholars who are early in their careers, with and without NBER affiliations, and who are members of groups that have been under-represented in economics are especially welcome.
To be considered for inclusion on the program, papers must be uploaded by midnight (EDT) on Wednesday, October 27th, 2021 to:
Authors chosen to present papers at the conference will be notified by early December, 2021. The NBER will cover the cost for two authors per paper to attend the September 2022 conference in Cambridge, MA; all co-authors will be invited to attend. All authors will be invited to the virtual pre-conference.
Papers that are presented at the conference will be eligible for distribution in the NBER working paper series and will be considered for inclusion, subject to the standard review process, in a special issue of the Journal of Labor Economics that will be published in 2023. Authors will receive a modest honorarium for their participation in the project.
Questions about this conference may be addressed to email@example.com.