Wage Cyclicality and Labor Market Sorting
- (pp. 425-42)
AbstractThis paper uses a measure of skill mismatch to separate wage flexibility from confounding variation in wages driven by differences in job quality over the business cycle. I first show that the high cyclicality of job switchers' wages goes beyond cyclical movements in skill mismatch. Then I uncover large differences in wage cyclicality across the skill mismatch distribution. Among incumbent workers, wages are acyclical in good matches but procyclical in poor matches, in particular for overqualified workers.
CitationFigueiredo, Ana. 2022. "Wage Cyclicality and Labor Market Sorting." American Economic Review: Insights, 4 (4): 425-42. DOI: 10.1257/aeri.20210161
- E32 Business Fluctuations; Cycles
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J41 Labor Contracts