Value Added, Wages, and Labor Market Flows at the Establishment Level

Christian Merkl and Heiko Stüber ()
Additional contact information
Heiko Stüber: Hochschule der Bundesagentur für Arbeit (HdBA)

No 11314, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper, we analyze the connection between value added, wages, and labor market flows at the establishment level. We develop a simple model to illustrate the expected comovement of these variables. For the empirical analysis, we link the new German Administrative Wage and Labor Market Flow Panel (AWFP) dataset to the IAB Establishment Panel. We show that establishments' hires rates have a positive and separations rates a negative comovement with establishment-specific value added, whereby hires react by more than separations. In addition, we provide evidence that establishments' partial equilibrium reaction is an important driver for aggregate labor market dynamics.

Keywords: labor market flows; value added; wages; administrative data; establishments (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2018-02
New Economics Papers: this item is included in nep-eur and nep-ure
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Citations: View citations in EconPapers (2)

Published - published in: Applied Economics Letters, 2019, 26, 135-142

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https://docs.iza.org/dp11314.pdf (application/pdf)

Related works:
Journal Article: Value added, wages and labour market flows at the establishment level (2019)
Working Paper: Value added, wages, and labor market flows at the establishment level (2017)
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