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Title:Exchange rates and wages PDF Logo
Authors:Goldberg, Linda
Tracy, Joseph
Issue Date:2001
Series/Report no.:Staff Report, Federal Reserve Bank of New York 116
Abstract:Understanding the effects of exchange rate fluctuations across the population is important for increasingly globalized economies. Previous studies using industry aggregate data have found that industry wages are significantly more responsive than industry employment to exchange rate changes. We offer an explanation for this paradoxical finding. Using Current Population Survey data for 1976 through 1998, we document that the main mechanism for exchange rate effects on wages occurs through job turnover and the strong consequences this has for the wages of workers undergoing such job transitions. By contrast, workers who remain with the same employer experience little, if any, wage impacts from exchange rate shocks. In addition, we find that the least educated workers
Subjects:who also have the most frequent job changes
JEL:F31
F3
F4
J30
E24
Document Type:Working Paper
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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