How Cyclical Is the User Cost of Labor?

Marianna Kudlyak

No 18964, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In employment relationships, a wage is an installment payment on an implicit long-term agreement between a worker and a firm. The price of labor that impacts firm’s hiring decisions, instead, reflects the hiring wage as well as the impact of economic conditions at the time of hiring on future wages. Measured by the labor’s user cost, the price of labor is substantially more pro-cyclical than the new-hire wage or the average wage. The strong procyclicality of the price of labor calls for other forces for cyclical labor demand to explain employment fluctuations.

Date: 2024-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18964 (application/pdf)

Related works:
Journal Article: How Cyclical Is the User Cost of Labor? (2024)
Working Paper: How Cyclical Is the User Cost of Labor? (2024)
Working Paper: How Cyclical Is the User Cost of Labor? (2024)
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:cpr:ceprdp:18964

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18964

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().