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- Title
PERMANENT DIFFERENCES IN UNEMPLOYMENT AND PERMANENT WAGE DIFFERENTIALS.
- Authors
Adams, James D.
- Abstract
This paper tests for the existence of wage premiums based on geographic and industry unemployment differences. These differences are broken down into permanent and transitory components in equations controlling for variation in state generosity of unemployment insurance benefits. Findings indicate that wage premiums arise for long-run unemployment differences, but that negative short-run shocks to industries generate wage cuts, while positive shocks generate wage hikes. Therefore, labor contracts accommodate long-term anticipated unemployment, and entail sharing of short-term unemployment risks.
- Subjects
UNEMPLOYMENT; PAY equity; WAGE differentials; WAGES; UNEMPLOYMENT insurance; INCOME maintenance programs; LABOR contracts
- Publication
Quarterly Journal of Economics, 1985, Vol 100, Issue 1, p29
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1885734