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- Title
LABOR MARKET VOLATILITY, SKILLS, AND FINANCIAL GLOBALIZATION.
- Authors
Buch, Claudia M.; Pierdzioch, Christian
- Abstract
We analyze the impact of financial globalization on volatilities of hours worked and wages of high-skilled and low-skilled workers. Using cross-country, industry-level data for the years 1970–2004, we establish stylized facts that document how volatilities of hours worked and wages of workers with different skill levels have changed over time. We then document that the volatility of hours worked by low-skilled workers has increased the most in response to the increase in financial globalization. We develop a dynamic stochastic general equilibrium model of a small open economy that is consistent with the empirical results. The model predicts that greater financial globalization increases the volatility of hours worked, and this effect is strongest for low-skilled workers.
- Subjects
LABOR market; MARKET volatility; FINANCIAL globalization; ECONOMIC impact; WAGES; ECONOMIC equilibrium
- Publication
Macroeconomic Dynamics, 2014, Vol 18, Issue 5, p1018
- ISSN
1365-1005
- Publication type
Article
- DOI
10.1017/S1365100512000739