Abstract:
This paper examines the relationship between labour market conditions and wage dynamics by
exploiting a unique dataset of 0.8 million online job vacancies. We find a weak trade-off
between aggregated national-level wage inflation and unemployment. This link becomes more
evident when wage inflation is disaggregated at sectoral and occupational levels. Using
exogenous variations in local market unemployment as the main identification strategy, a
negative correlation between vacancy-level wage and unemployment is also established. The
correlation magnitude, however, is different across regions and skill segments. Our findings
suggest the importance of micro data’s unique dimensions in examining wage setting –
unemployment relationship.
