The change in wages

Résumé du document

The change in wages in 14 economies between 1979 to 2007 does not seem to be linked to the change in productivity. An additional increase of productivity of 1% in an economy would result in an increase of the expected change in wages for its people by 0.03%. This effect is rather weak. However, the coefficient of correlation (+0.024) indicates a very weak linear relationship.

Extraits

[...] Krugman, P.R. & Obstfeld, M. (2009). International Economics: Theory & Policy ed.). Retrieved October from http://wps.aw.com/aw_krgmnobstf_interecon_8/84/21573/5522919.cw/index.html R Development Core Team (2008). A Language and Environment for Statistical Computing [Computer software]. Vienna: R Foundation for Statistical Computing. Retrieved from http://www.R-project.org. [...]

[...] The dependent variable is the change in wages (with a mean of and a standard deviation of 1.404 which is estimated by the average annual percentage rate of change of the hourly compensation (expressed in national currency) between 1979 and 2007. A scatter plot and the line of best fit show the relationship between the change in productivity and the change in wages (figure 1). The coefficient of correlation is + indicating a weak positive linear relationship between the change in productivity and the change in wages. The equation of the line of best fit is: (change in wages, = 5.317 + 0.03 (change in productivity, As expected, an increase in productivity is translated into an increase in wages. [...]

[...] Wages:National Currency Basis (average annual percentage rates of change 1979-2007) I 7 Sp T UK No 6 Sw F D 5 C G B Ne 4 US 3 J Productivity (average annual percentage rates of change 1979-2007) Figure 1. The relationship between the change in productivity and the change in wages in economies (sample size = 14). Note. Data from Bureau of Labor Statistics (2008). Scatter plot and line of best fit were obtained using the R statistical environment Development Core Team, 2008). References Change in Wages 4 Bureau of Labor Statistics (2008). International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends Retrieved October from http://stats.bls.gov/news.release/prod4.nr0.htm. [...]