« We know the economy needs a bubble; but how big? | Main | Natural rate =/= trend or average »


Feed You can follow this conversation by subscribing to the comment feed for this post.

My first thought was: so real wages increased faster during the recession than previously. OK, so that confirms that wages are stickier than prices.

But there's something a little strange about the third and fourth graphs. The fourth graph shows 2006-2012, which isn't very different from 2007-2012. But the blue 2006-2012 graph is so strongly above the red 1997-2006 graph. Was there a big real wage increase in 2006-2007?

Well, the vertical scale *is* different. But I think it's more that the pre-2002 data are dragging down the 1997-2006 data.

eta: I just added a link to a graph with the same vertical axis.

This is why more charts should be presented as animated gifs, one curve or a 3 yr moving average, per second, with the year flashed at the bottom right as you see the distribution evolve in time.

Stephen, did the micro-data you cut-off very high and low earnings? Whenever I looked at PUMS I had to discard the ends because of this.

To avoid misunderstandings: This is about wages, right? So unemployed drop out of the distribution? Then isn't the increase in the lowest percentile possibly driven by, say, very-low income workers becoming unemployed during a recession so that the rest of the former distribution is stretched over the whole range now?

Does this include pension and benefits?

rsj: I know the census PUMF truncate income at the top, but I don't recall seeing anything about that in the LFS documentation (it may be, I just don't remember seeing it). But even if they aren't, the point is still well-taken. The numbers at the extremes - say, the top/bottom 2% or 3% - should definitely be taken with a grain if salt. But the real story IMV is what's happening across the entire distribution.

Joe: Yes, it's about wages.

Robert: No. I wanted to see what was happening in the labour market.


Green and Sand do the following:

- fulltime workers only
- weeks worked between 1 and fullyear
- total income>0
- divide annual earnings by weeks to get weekly earnings
- use log(weekly earnings)

The picture looks quite different when you actually do what Green and Sand do. Myself, I would be much more hesitant to make definitive statements in comparing some LFS results using a different measure to what Green and Sand did.

I will post some charts using the SLID shortly.

I wasn't actually trying to reproduce the Green and Sand results, especially insofar as they only looked at full-time workers. The reduction in earnings from cutting back on hours worked by part-time workers during the recession is something I wanted to take into account.

Here is my post:

Three conclusions:

* Median earnings growth is greater than zero for males since 1996. This is good news.

* Earnings growth continues to be skewed, in particular in the top 10 percent. Male earnings polarization appears to be continuing up to 2010.

* It is important to use similar data and methodology when comparing results to those in the literature.

Hi Stephen. What's the difference between this one you just posted

and the ones in the blog post above? Thanks.

The graphs above are the growth rates of a given percentile over 2 points in time: eg, change in 75th percentile between 2007 and 2012.

The graph I posted on twitter took the average of a given percentile over 1997-2000 and compared it to the average of the same percentile over 2006-10.


Are you averaging the percentage growth, or averaging the earnings then calculating the percentage growth?

I just posted here https://twitter.com/kevinmilligan/status/412328192527958016 2010 vs 1996, no 5-yr averaging. Still see big take-off of earnings at the top.

The comments to this entry are closed.

Search this site

  • Google

Blog powered by Typepad