Cyclical Job Ladders by Firm Size and Firm Wage

John Haltiwanger, Henry Hyatt, Lisa Kahn and Erika McEntarfer

American Economic Journal: Macroeconomics, 2018, vol. 10, issue 2, 52-85

Abstract: We study whether workers progress up firm wage and size job ladders, and the cyclicality of this movement. Search theory predicts that workers should flow toward larger, higher paying firms. However, we see little evidence of a firm size ladder, partly because small, young firms poach workers from all other businesses. In contrast, we find strong evidence of a firm wage ladder that is highly procyclical. During the Great Recession, this firm wage ladder collapsed, with net worker reallocation to higher wage firms falling to zero. The earnings consequences from this lack of upward progression are sizable.

JEL-codes: D22 E24 E32 J31 J63 J64 L25 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mac.20150245
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