Elasticity of supply to the firm and the business cycle

Arbeitspapier

A body of recent empirical work has found strong evidence that the labor elasticity of supply to the firm is finite, implying that firms may have wage setting power. However, these studies capture only snapshots of the parameter. We study this parameter over a period that provides substantial variation in the business cycle. Using a rich employee level dataset from the inter-war period, we are able to estimate the elasticity of supply to the firm during several recessions and expansions. Our analysis suggests that the elasticity is indeed lower during recessions, consistent with the comparative statics from the Burdett-Mortensen search model. This differential wage setting power over the business cycle provides an alternative explanation of the pro-cyclicality of wages.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 5928

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Monopsony; Segmented Labor Markets ; Wage Level and Structure; Wage Differentials ; Unemployment: Models, Duration, Incidence, and Job Search
• Thema: monopsony ; labor market frictions ; business cycles ; Arbeitsangebot ; Elastizität ; Monopson ; Lohn ; Konjunktur ; Kraftfahrzeugindustrie ; USA

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Depew, Briggs ; Sorensen, Todd
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2011

Weitere Informationen

• Handle: http://hdl.handle.net/10419/55117
• URN: urn:nbn:de:101:1-20110927565
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ