Wage Determinants in the United States
Category
Business, Education and Humanities
Department
Finance, Business Economics
Student Status
Undergraduate
Research Advisor
Dr. Michael Davidsson
Document Type
Event
Location
Meadowlark
Start Date
10-4-2025 11:20 AM
End Date
10-4-2025 11:20 AM
Description
This study aims to analyze and quantify the macroeconomic factors that determine Wages in the United States from 2000 through 2020. Wages can be defined as Total Weekly Earnings of full-time wage seasonally adjusted for individuals 16 years and older. This study will use quarterly data that includes 84 observations. The determinants that this study will focus on are the Unemployment rate, GDP growth rate, the Consumer Price index, Labor Productivity, the Employment Population rate, the Federal Funds rate, and Personal Consumption Expenditure. This study will use a pooled regression to help us analyze the data along with using the Ordinary Least Square Regression model. As this study tries to explain and examine the determinants of total weekly earnings from a macroeconomic view, there was a significant positive relationship between Wages and Labor Productivity with an increase of 1.31%. This can be explained when firms produce more, they will be able to pay the workers more. There was a significant positive relationship between Wages and the Federal Funds rate which saw an increase of 1.57%. When the Federal Funds Rate is low it encourages more borrowing and spending which makes businesses invest in themselves this could explain the increase in wages and the Federal Funds Rate. There was also a significant positive relationship between Wages and Personal Consumption Expenditure. Personal Consumption Expenditure will increase by 8% when wages increase. When individuals make more in wages, they tend to spend more this can explain the positive relationship between Wages and Personal Consumption Expenditure.
Wage Determinants in the United States
Meadowlark
This study aims to analyze and quantify the macroeconomic factors that determine Wages in the United States from 2000 through 2020. Wages can be defined as Total Weekly Earnings of full-time wage seasonally adjusted for individuals 16 years and older. This study will use quarterly data that includes 84 observations. The determinants that this study will focus on are the Unemployment rate, GDP growth rate, the Consumer Price index, Labor Productivity, the Employment Population rate, the Federal Funds rate, and Personal Consumption Expenditure. This study will use a pooled regression to help us analyze the data along with using the Ordinary Least Square Regression model. As this study tries to explain and examine the determinants of total weekly earnings from a macroeconomic view, there was a significant positive relationship between Wages and Labor Productivity with an increase of 1.31%. This can be explained when firms produce more, they will be able to pay the workers more. There was a significant positive relationship between Wages and the Federal Funds rate which saw an increase of 1.57%. When the Federal Funds Rate is low it encourages more borrowing and spending which makes businesses invest in themselves this could explain the increase in wages and the Federal Funds Rate. There was also a significant positive relationship between Wages and Personal Consumption Expenditure. Personal Consumption Expenditure will increase by 8% when wages increase. When individuals make more in wages, they tend to spend more this can explain the positive relationship between Wages and Personal Consumption Expenditure.
