Value added, wages, and labor market flows at the establishment level

Arbeitspapier

In this paper, we analyze the connection between value added, wages, and labor market ows at the establishment level. For this purpose, we first develop a simple model to illustrate the expected comovement of these variables. For the empirical analysis, we link the new German Administrative Wage and Labor Market Flow Panel (AWFP) dataset to the IAB Establishment Panel survey. We show that establishments' hires rates have a positive and separations rates a negative comovement with establishment-specific value added, whereby hires react by more than separations. Our estimation results point towards inefficient separation behavior in some parts of the economy. In addition, we provide evidence that establishments' partial equilibrium reaction is an important driver for aggregate labor market dynamics.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: FAU Discussion Papers in Economics ; No. 03/2017

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Business Fluctuations; Cycles ; Unemployment: Models, Duration, Incidence, and Job Search
• Subject: labor market flows ; value added ; wages ; administrative data ; establishments

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Merkl, Christian ; Stüber, Heiko
• Event: Veröffentlichung
• (who): Friedrich-Alexander-Universität Erlangen-Nürnberg, Institute for Economics
• (where): Nürnberg
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/149653
• Last update: 10.03.2025, 11:42 AM CET