The wage curve within and across regions: new insights from a pairwise view of US states

Mark J. Holmes, Jesús Otero

Research output: Contribution to journalArticlepeer-review

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 languageEnglish (US)
JournalEmpirical Economics
DOIs
StateAccepted/In press - 2021

All Science Journal Classification (ASJC) codes

  • Statistics and Probability
  • Mathematics (miscellaneous)
  • Social Sciences (miscellaneous)
  • Economics and Econometrics

Cite this