The life-cycle and the business-cycle of wage risk: a cross-country comparison

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 4402

Classification and Topics

• Classification: Wirtschaft ; Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data) ; Personal Income, Wealth, and Their Distributions ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Wage Level and Structure; Wage Differentials
• Subject: Life-cycle risk ; uncertainty fluctuations ; business cycle ; heterogeneity ; wages ; Verdienstausfall ; Lohn ; Risiko ; Lebenszyklus ; Konjunktur ; Vergleich ; USA ; Großbritannien ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bayer, Christian ; Juessen, Falko
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/36257
• URN: urn:nbn:de:101:1-200910091042
• Last update: 10.03.2025, 11:44 AM CET