TY  - JOUR
AU  - Shin,Donggyun
AU  - Solon,Gary
TI  - New Evidence on Real Wage Cyclicality within Employer-Employee Matches
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12262
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12262
L1  - http://www.nber.org/papers/w12262.pdf
N1  - Author contact info:
Donggyun Shin
College of Economics and Finance
Hanyang University
Seongdong-Gu, Haedang-Dong 17
Seoul 133-791, South Korea
E-Mail: dgshin@hanyang.ac.kr

Gary Solon
Department of Economics
Michigan State University
East Lansing, MI 48824-1038
Tel: 517/353-9933
Fax: 517/432-1068
E-Mail: solon@msu.edu
M2  - featured in NBER digest on 2006-05-29
AB  - In the most thorough study to date on wage cyclicality among job stayers, Devereux%u2019s (2001) analysis of men in the Panel Study of Income Dynamics produced two puzzling findings: (1) the real wages of salaried workers are noncyclical, and (2) wage cyclicality among hourly workers differs between two alternative wage measures. We examine these puzzles with additional evidence from other sources. Devereux%u2019s finding of noncyclical real wages among salaried job stayers is not replicated in the National Longitudinal Survey of Youth data. The NLSY data, however, do corroborate his finding of a discrepancy for hourly workers between the cyclicality of the two alternative wage measures. Evidence from the PSID Validation Study contradicts Devereux%u2019s conjecture that the discrepancy might be due to a procyclical bias from measurement error in average hourly earnings. Evidence from the Bureau of Labor Statistics establishment survey supports his hypothesis that overtime work accounts for part (but not all) of the discrepancy. We conclude that job stayers%u2019 real average hourly earnings are substantially procyclical and that an important portion of that procyclicality probably is due to compensation beyond base wages.
ER  -