Value added, wages, and labor market flows at the establishment level

Christian Merkl and Heiko Stüber

No 03/2017, FAU Discussion Papers in Economics from Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics

Abstract: In this paper, we analyze the connection between value added, wages, and labor market ows at the establishment level. For this purpose, we first 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 survey. 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. Our estimation results point towards inefficient separation behavior in some parts of the economy. 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)
Date: 2017
New Economics Papers: this item is included in nep-eur and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/149653/1/877601798.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 (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwqwdp:032017

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