Replication data for: Does Wage Persistence Matter for Employment Fluctuations? Evidence from Displaced Workers

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Project Citation:

Schmieder, Johannes F., and von Wachter, Till. Replication data for: Does Wage Persistence Matter for Employment Fluctuations? Evidence from Displaced Workers. Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113754V1

Project Description

Summary: Previous literature has found that tight labor market conditions during a job raise wages. Using the Displaced Worker Survey from 1984 to 2006, we show that wage gains associated with good labor market conditions disappear at job loss. We also find that workers with higher wages due to tight past labor market conditions face higher risk of layoff. These findings suggest an important role of persistent rigidities in the wage setting process that are related to layoff decisions. This supports the notion that downward rigid employment contracts help explain the Shimer (2005) "puzzle" of low wage relative to employment fluctuations. (JEL J31, J41, J63)

Scope of Project

JEL Classification:
      J31 Wage Level and Structure; Wage Differentials
      J41 Labor Contracts
      J63 Labor Turnover; Vacancies; Layoffs

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V1 [2019-10-12]

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