Cyclical labor costs within jobs

Daniel Schaefer () and Carl Singleton
Additional contact information
Daniel Schaefer: School of Economics, University of Edinburgh
Authors registered in the RePEc Author Service: Daniel Schäfer

No em-dp2019-03, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: Using UK employer-employee panel data, we present novel facts on how wages and working hours respond to the business cycle within jobs. Firms reacted to the Great Recession with substantial real wage cuts and by recruiting more part-time workers. A one percentage point increase in the unemployment rate led to an average decline in real hourly wages of 2.6 percent for new hires as well as for job stayers. Hiring hours worked were substantially procyclical, while job-stayer hours were acyclical. These results show that real wages are not rigid and that the labor costs of new hires are especially flexible.

Keywords: Wage rigidity; Great Recession; Hours worked; Job-level analysis (search for similar items in EconPapers)
JEL-codes: E24 E32 J30 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2019-04-07
New Economics Papers: this item is included in nep-eur, nep-hrm and nep-mac
References: View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published in European Economic Review, 120, https://doi.org/10.1016/j.euroecorev.2019.103317

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http://www.reading.ac.uk/web/FILES/economics/emdp201903.pdf

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Journal Article: Cyclical labor costs within jobs (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:rdg:emxxdp:em-dp2019-03

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