Wage Phillips Curve of a Large Emerging Economy: Role of Structural Heterogeneity

Behera, Harendra and Mazumder, Debojyoti and ., Kaustubh (2025): Wage Phillips Curve of a Large Emerging Economy: Role of Structural Heterogeneity.

Abstract

The paper finds the role of dynamic structural heterogeneity in establishing the empirical existence and convexity of the wage Phillips curve for large emerging economies. Using Indian state-level data, we find a negative and convex relationship between earnings growth and unemployment after controlling for structural labour market factors that vary over time and across states. The fixed effects regression model suggests that a higher speed of formalization makes the wage-Phillips curve flatter, controlling for changes in the composition of labour supply and skilling.

• Item Type: MPRA Paper
• Language: English
• Keywords: Unemployment, Wage growth, Wage Phillips curve, Emerging Economies
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J20 - General; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General

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