Evolving Wage Cyclicality in Latin America
A vector autoregression model with time-varying coefficients is used to examine the evolution of wage cyclicality in four Latin American economies: Brazil, Chile, Colombia and Mexico, during the period 1980-2010. Wages are highly pro-cyclical in al...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/07/19881767/evolving-wage-cyclicality-latin-america http://hdl.handle.net/10986/19346 |
| Summary: | A vector autoregression model with
time-varying coefficients is used to examine the evolution
of wage cyclicality in four Latin American economies:
Brazil, Chile, Colombia and Mexico, during the period
1980-2010. Wages are highly pro-cyclical in all countries up
to the mid-1990s except in Chile. Wage cyclicality declines
thereafter, especially in Brazil and Colombia. This decline
in wage cyclicality is in accordance with declining
real-wage flexibility in a low-inflation environment.
Controlling for compositional effects caused by changes in
labor force participation along the business cycle does not
alter these results. |
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