Earnings Dynamics, Mobility Costs, and Transmission of Market-Level Shocks

Magne Mogstad, Bradley Setzler and Thibaut Lamadon

No 1483, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: We study the cost of workers reallocation between firms, industries and regions. Using IRS tax records on individuals’ earnings together with data on firms balance sheet, we estimate the pass-through of firm, region, and industry shocks to workers earnings. Using a stylized static model, link these pass-through estimates to costs of reallocating workers. Finally, we introduce long-term contracts and study the non-linear transmission of productivity shocks to earnings.

Date: 2017
New Economics Papers: this item is included in nep-bec, nep-dge and nep-ure
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