focalinterest.net

Tag: Labor, Employment & Inequality

  • Inflation is linked to more job moves and higher vacancies

    What the study found

    The study finds that unexpected increases in the price level can encourage workers to move from one job to another because nominal wage stickiness, meaning wages do not adjust quickly in dollar terms, limits wage responses. The authors also report that this pattern is associated with higher vacancies, lower real wages, and an apparent tight labor market during inflationary periods.

    Why the authors say this matters

    The authors conclude that the rise in the vacancy-to-unemployment rate should not automatically be read as a sign of a tight labor market during inflationary periods. They suggest policymakers and academics should look at multiple labor market indicators together before drawing that conclusion.

    What the researchers tested

    The researchers developed a model that combines modern theories of labor market flows with nominal wage rigidities. They calibrated the model using data from 2021 to 2024 and also examined historical data on inflation, vacancies, and the Beveridge curve, which relates job vacancies to unemployment.

    What worked and what didn't

    The calibrated model jointly matches aggregate and cross-sectional trends in worker flows and wages during the 2021–2024 period. The authors also find that earlier high-inflation periods were associated with rising vacancies and upward shifts in the Beveridge curve.

    What to keep in mind

    The abstract does not describe specific limitations beyond the scope of the model and the periods studied. The historical pattern and the 2021–2024 results are presented as findings from the model and data analyzed in the paper.

    • Unexpected inflation can push workers toward job-to-job transitions when wages are sticky.
    • The model links inflation with higher vacancies and lower real wages.
    • The calibrated model matches worker-flow and wage trends from 2021 to 2024.
    • Historical high-inflation periods were also associated with upward shifts in the Beveridge curve.
    • The authors caution against reading a higher vacancy-to-unemployment rate as simple evidence of a tight labor market during inflation.

  • Tenure raises wages mainly after long employment in South Korea

    What the study found

    The study found that in South Korea, 10 years of tenure has no significant effect on log wages, but 20 years of tenure is associated with wage increases of 11% to 30%. It also found that sector-specific skills matter more for wage growth than occupation-specific skills.

    Why the authors say this matters

    The findings indicate that seniority and experience do not affect wages in the same way, and the authors suggest that sector-specific skills are an important part of wage growth in South Korea. The study suggests this is relevant for understanding how wages change over time in the labor market.

    What the researchers tested

    The researcher used 20 years of data from the Korean Labor and Income Panel Study (KLIPS), a long-running survey of workers' earnings and jobs. The study examined wage returns to general experience, firm tenure, and industry- and occupation-specific tenure using the Altonji and Shakotko instrumental variable approach and the Topel two-step estimation method to address bias from unobserved heterogeneity.

    What worked and what didn't

    Longer tenure showed a positive association with wages only at the 20-year level, where wages rose by 11%–30%. By contrast, 10 years of tenure was not significantly related to log wages, and occupation-specific returns were minimal. Sector-specific skills showed a critical role in wage growth.

    What to keep in mind

    The abstract does not describe detailed limitations beyond the use of the available data and methods. The findings are based on South Korea and on the measures used for experience and tenure in this study.

    • Using 20 years of KLIPS data, the study examined wage returns to experience and different kinds of tenure in South Korea.
    • Ten years of tenure had no significant effect on log wages.
    • Twenty years of tenure was associated with wage increases of 11% to 30%.
    • Sector-specific skills played a critical role in wage growth.
    • Occupation-specific wage returns were minimal.