Cyclical Job Ladders by Firm Size and Firm Wage
- (pp. 52-85)
Abstract
We study whether workers progress up firm wage and size job ladders, and the cyclicality of this movement. Search theory predicts that workers should flow toward larger, higher paying firms. However, we see little evidence of a firm size ladder, partly because small, young firms poach workers from all other businesses. In contrast, we find strong evidence of a firm wage ladder that is highly procyclical. During the Great Recession, this firm wage ladder collapsed, with net worker reallocation to higher wage firms falling to zero. The earnings consequences from this lack of upward progression are sizable.Citation
Haltiwanger, John C., Henry R. Hyatt, Lisa B. Kahn, and Erika McEntarfer. 2018. "Cyclical Job Ladders by Firm Size and Firm Wage." American Economic Journal: Macroeconomics, 10 (2): 52-85. DOI: 10.1257/mac.20150245Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E32 Business Fluctuations; Cycles
- J31 Wage Level and Structure; Wage Differentials
- J63 Labor Turnover; Vacancies; Layoffs
- J64 Unemployment: Models, Duration, Incidence, and Job Search
- L25 Firm Performance: Size, Diversification, and Scope
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