This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. AEA Papers and Proceedings
  4. May 2023
  5. The Wage Phillips Curve under Labor Market Power

The Wage Phillips Curve under Labor Market Power

  • Anastasia Burya
  • Rui Mano
  • Yannick Timmer
  • Anke Weber
AEA Papers and Proceedings
vol. 113, May 2023
(pp. 110-13)
Download Full Text PDF

Abstract

Using the near universe of online vacancy postings in the United States, we explore linkages between labor market power and the trade-off between unemployment and wages. We estimate the Phillips curve at the commuting zone level and find that the relationship between unemployment and wage inflation is weak in regions with high labor market power. These results help explain the flattening of the wage Phillips curve following the global financial crisis. In the context of rising interest rates, unemployment is likely to rise more in poorer US regions because labor market power is more prevalent there, thus leading to rising inequality.

Citation

Burya, Anastasia, Rui Mano, Yannick Timmer, and Anke Weber. 2023. "The Wage Phillips Curve under Labor Market Power." AEA Papers and Proceedings, 113: 110-13. DOI: 10.1257/pandp.20231007

Additional Materials

JEL Classification

  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • E31 Price Level; Inflation; Deflation
  • E52 Monetary Policy
  • J23 Labor Demand
  • J31 Wage Level and Structure; Wage Differentials
  • J63 Labor Turnover; Vacancies; Layoffs
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics