The Heterogeneous Cyclicality of Income and Wages Among the Distribution in the UK

We investigate the cyclicality of real hourly wages and income using individual data for the UK over the 1991–2013 period. By paying special attention to the heterogeneity among different earnings and income groups, we document that individuals at the top of the distribution are more cyclical than l...

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Bibliographic Details
Published in:IDEAS Working Paper Series from RePEc 2018-04, Vol.18 (2)
Main Authors: Cervini-Plá, María, López-Villavicencio, Antonia, Silva, José I.
Format: Article
Language:English
Subjects:
cyclicality
E24
E32
Earnings
Economics and Finance
Humanities and Social Sciences
income distribution
J31
Low income groups
real wage
Real wages
Studies
Transitions
Unemployment
Wages & salaries
Workers
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Summary:We investigate the cyclicality of real hourly wages and income using individual data for the UK over the 1991–2013 period. By paying special attention to the heterogeneity among different earnings and income groups, we document that individuals at the top of the distribution are more cyclical than lower ones. We also show that real wages and income are roughly acyclical for low-wage and low-income workers. In particular, we present evidence that the adjustment for low-paid workers takes place through transitions to and from unemployment.
ISSN:2194-6108
1935-1682
DOI:10.1515/bejeap-2017-0181