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Wage rigidity and job creation

Christian Haefke (), Marcus Sonntag and Thijs van Rens ()

Journal of Monetary Economics, 2013, vol. 60, issue 8, 887-899

Abstract: Recent research in macroeconomics emphasizes the role of wage rigidity in accounting for the volatility of unemployment fluctuations. We use worker-level data from the CPS to measure the sensitivity of wages of newly hired workers to changes in aggregate labor market conditions. The wage of new hires, unlike the aggregate wage, is volatile and responds almost one-to-one to changes in labor productivity. We conclude that there is little evidence for wage rigidity in the data.

Keywords: Wage rigidity; Search and matching model; Business cycle (search for similar items in EconPapers)
Date: 2013
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Related works:
Working Paper: Wage Rigidity and Job Creation (2012) Downloads
Working Paper: Wage Rigidity and Job Creation (2012) Downloads
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Working Paper: Wage Rigidity and Job Creation (2006) Downloads
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