Real Wages and Hours in the Great Recession: Evidence from Firms and their Entry-Level Jobs
Daniel Schaefer and
Carl Singleton ()
Authors registered in the RePEc Author Service: Daniel Schäfer
No 6766, CESifo Working Paper Series from CESifo Group Munich
Using employer-employee panel data, we provide novel facts on how real wages and working hours within jobs responded to the UK’s Great Recession. In contrast to previous studies, our data enables us to address the cyclical composition of jobs. We show that firms were able to respond to the Great Recession with substantial real wage cuts and by recruiting more part-time workers. A one percentage point increase in the unemployment rate led to an average decline in real hourly wages of 2.8 per cent for new hires and 2.6 per cent for job stayers. Hours of new hires in entry-level jobs were also substantially procyclical, while job-stayer hours were nearly constant. Our findings suggest that models assuming rigid labour costs of new hires are not helpful for understanding the behaviour of unemployment over the business cycle.
Keywords: wage rigidity; Great Recession; hours worked; job-level analysis (search for similar items in EconPapers)
JEL-codes: E24 E32 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-hrm, nep-lma and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6766
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Group Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().