Cyclical Job Ladders by Firm Size and Firm Wage
Lisa B. Kahn and
Erika McEntarfer ()
No 23485, NBER Working Papers from National Bureau of Economic Research, Inc
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 towards 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: E24 E32 J63 (search for similar items in EconPapers)
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