Abstract
The novel application of a pairwise autoregressive distributed lag (ARDL) approach provides new insights into the regional wage–unemployment rate relationship. Using this approach, the short- and long-run wage curve slope for each US state is potentially inversely related to the unemployment rate in all other states. In terms of the oft-cited Blanchflower and Oswald elasticity, there is mixed evidence in support of a -0.1 wage curve slope. We find that the pairwise wage curve slope is driven by factors that include state-level home-ownership and education attainment. Our findings suggest that short-run wage flexibility decreased during the period following the Great Recession.
Original language | English (US) |
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Journal | Empirical Economics |
DOIs | |
State | Accepted/In press - 2021 |
All Science Journal Classification (ASJC) codes
- Statistics and Probability
- Mathematics (miscellaneous)
- Social Sciences (miscellaneous)
- Economics and Econometrics