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Title:The life-cycle and the business-cycle of wage risk: a cross-country comparison PDF Logo
Authors:Bayer, Christian
Juessen, Falko
Issue Date:2009
Series/Report no.:IZA Discussion Papers 4402
Abstract:This paper provides a cross-country comparison of life-cycle and business-cycle fluctuations in the dispersion of household-level wage innovations. We draw our inference from household panel data sets for the US, the UK, and Germany. First, we find that household characteristics explain about 25% of the dispersion in wages within an age group in all three countries. Second, the cross-sectional variance of wages is almost linearly increasing in household age in all three countries, but with increments being smaller in the European data. Third, we find that wage risk is procyclical in Germany while it is countercyclical in the US and acyclical in the UK, pointing towards labor market institutions being pivotal in determining the cyclical properties of labor market risk.
Subjects:Life-cycle risk
uncertainty fluctuations
business cycle
heterogeneity
wages
JEL:E20
D31
D91
J31
Persistent Identifier of the first edition:urn:nbn:de:101:1-200910091042
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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