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Increase in worker wages from a 1 percentage-point fall in unemployment, by wage group

Note: Low-, median-, and high-wage refer, respectively, to wages at the 10th, 50th, and 90th percentiles.

Source: Authors' analysis of Current Population Survey Outgoing Rotation Group microdata

Updated May 21, 2012

Documentation and methodology

Estimates are based on a model employed by Katz and Krueger (1999). Annual changes in log wages are regressed on unemployment, lagged log-changes in the CPI-U-RS (but, following Katz and Krueger the coefficient on this is constrained to equal 1), lagged productivity growth, and dummies for 1989–1995, 1996–2000, and 2001–2007 (excluded period is 1979–1988). The sample covers the years 1979–2007.

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