Arbeitspapier

Wage Cyclicalities and Labor Market Dynamics at the Establishment Level: Theory and Evidence

Using the new AWFP dataset that covers all German establishments, we document a substantial cross-sectional heterogeneity of establishments' average real wages over the business cycle. While the median establishments' real wages are procyclical, there is a large fraction of establishments with countercyclical real wages. We are the first to show that establishments with more procyclical wages have a less procyclical hires rate and employment behavior. We propose a labor market flow model that is able to replicate these facts and thereby allows us to run counterfactual exercises. When we set the wage cyclicalities of all establishments to the one of the most procyclical establishments, labor market volatilities drop by more than 50 percent.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 11051

Klassifikation
Wirtschaft
Business Fluctuations; Cycles
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Unemployment: Models, Duration, Incidence, and Job Search
Thema
wage cyclicality
labor market flow model
labor market dynamics
establishments
administrative data
job and worker flows

Ereignis
Geistige Schöpfung
(wer)
Merkl, Christian
Stüber, Heiko
Ereignis
Veröffentlichung
(wer)
Institute of Labor Economics (IZA)
(wo)
Bonn
(wann)
2017

Handle
Letzte Aktualisierung
20.09.2024, 08:21 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Merkl, Christian
  • Stüber, Heiko
  • Institute of Labor Economics (IZA)

Entstanden

  • 2017

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