Job Selection and Wages over the Business Cycle

Marcus Hagedorn and Iourii Manovskii

American Economic Review, 2013, vol. 103, issue 2, 771-803

Abstract: We consider a model with on-the-job search where current wages depend only on current aggregate labor market conditions and idiosyncratic match-specific productivities. We show theoretically that the model replicates the findings in Bils (1985) and Beaudry and DiNardo (1991) on the history dependence in wages. We develop a method to measure match qualities in the data and show empirically that various variables summarizing past aggregate labor market conditions have explanatory power for current wages only because they are correlated with match qualities. They lose any predictive power once match qualities are accounted for. (JEL E3, E24, J3)

JEL-codes: E24 E30 J30 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.2.771
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (94)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.103.2.771 (application/pdf)
http://www.aeaweb.org/aer/data/april2013/20090968_data.zip (application/zip)
http://www.aeaweb.org/aer/data/april2013/20090968_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
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:aea:aecrev:v:103:y:2013:i:2:p:771-803

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().