EconPapers    
Economics at your fingertips  
 

New Evidence on Cyclical Variation in Labor Costs in the U.S

Grace Gu and Eswar Prasad ()

No 24266, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Employer-provided nonwage benefit expenditures now account for one-third of U.S. firms' labor costs. We show that a broad measure of real labor costs including such benefit expenditures has become countercyclical during 1982-2014, contrary to the conventional view that labor costs are procyclical. Using BLS establishment-job data, we find that even real wages, the main focus of prior literature, have become countercyclical. Benefit expenditures are less rigid than nominal wages, although both components of labor costs have become more rigid. These rigidities, along with the rising relative importance of aggregate demand shocks (including the financial crisis), help explain countercyclical labor costs.

JEL-codes: E24 E32 J3 J32 (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-mac
Note: IFM
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/w24266.pdf (application/pdf)

Related works:
Working Paper: New Evidence on Cyclical Variation in Labor Costs in the U.S (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24266

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24266

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-06-27
Handle: RePEc:nbr:nberwo:24266