Earnings dynamics and firm-level shocks

Benjamin Friedrich, Lisa Laun, Costas Meghir () and Luigi Pistaferri
Additional contact information
Benjamin Friedrich: Institute for Fiscal Studies
Costas Meghir: Institute for Fiscal Studies and Yale University
Luigi Pistaferri: Institute for Fiscal Studies and Stanford University

No W21/33, IFS Working Papers from Institute for Fiscal Studies

Abstract: We use matched employer-employee data from Sweden to study the role of the firm in affecting the stochastic properties of wages. Our model accounts for endogenous participation and mobility decisions. We find that firm-specific permanent productivity shocks transmit to individual wages, but the effect is mostly concentrated among the high-skilled workers. For low-skilled the pass-through is similar for temporary and permanent firm-level shocks and the magnitude smaller. The updates to worker-firm specific match effects over the life of a firm-worker relationship are small. Substantial growth in earnings variance over the life cycle for high-skilled workers is driven by firms. In particular, cross-sectional wage variances by age 55 are roughly one-third higher relative to a scenario with no pass-through of firm shocks onto wages.

Date: 2021-10-07
New Economics Papers: this item is included in nep-bec, nep-cwa, nep-eur, nep-his and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ifs.org.uk/uploads/WP202133-Earnings-dynamics-and-firm-level-shocks.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Working Paper: Earnings Dynamics and Firm-Level Shocks (2024)
Working Paper: Earnings Dynamics and Firm-Level Shocks (2019)
Working Paper: Earnings Dynamics and Firm-Level Shocks (2019)
Working Paper: Earnings Dynamics and Firm-Level Shocks (2019)
Working Paper: Earnings Dynamics and Firm-Level Shocks (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ifs:ifsewp:21/33

Ordering information: This working paper can be ordered from
The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE

Access Statistics for this paper

More papers in IFS Working Papers from Institute for Fiscal Studies The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE. Contact information at EDIRC.
Bibliographic data for series maintained by Emma Hyman ().