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Job ladders and growth in earnings, hours, and wages

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  • Hahn, Joyce K.
  • Hyatt, Henry R.
  • Janicki, Hubert P.

Abstract

We use U.S. matched employer-employee data to study the evolution of earnings, hours, and wages. We distinguish “stayers” who remain with the same employer from workers who transition. Hires from nonemployment receive relatively low pay, and therefore lessen average earnings and wages. This negative effect of entrants from nonemployment is offset by growth from stayers, employer-to-employer transitions, and other separations from low-paying jobs. Stayers drive aggregate changes in earnings and wages.

Suggested Citation

  • Hahn, Joyce K. & Hyatt, Henry R. & Janicki, Hubert P., 2021. "Job ladders and growth in earnings, hours, and wages," European Economic Review, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:eecrev:v:133:y:2021:i:c:s0014292121000076
    DOI: 10.1016/j.euroecorev.2021.103654
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    Cited by:

    1. Emin Dinlersoz & Henry Hyatt & Hubert Janicki, 2019. "Who Works for Whom? Worker Sorting in a Model of Entrepreneurship with Heterogeneous Labor Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 244-266, October.
    2. Kevin L. McKinney & John M. Abowd & Hubert P. Janicki, 2022. "U.S. long‐term earnings outcomes by sex, race, ethnicity, and place of birth," Quantitative Economics, Econometric Society, vol. 13(4), pages 1879-1945, November.
    3. Lachowska, Marta & Mas, Alexandre & Woodbury, Stephen A., 2022. "How reliable are administrative reports of paid work hours?," Labour Economics, Elsevier, vol. 75(C).
    4. Kevin L. McKinney & John M. Abowd, 2024. "Estimating the Potential Impact of Combined Race and Ethnicity Reporting on Long-Term Earnings Statistics," NBER Chapters, in: Race, Ethnicity, and Economic Statistics for the 21st Century, National Bureau of Economic Research, Inc.
    5. Felipe Alves, 2022. "Job Ladder and Business Cycles," Staff Working Papers 22-14, Bank of Canada.
    6. Joyce K. Hahn & Henry R. Hyatt & Hubert P. Janicki & Stephen R. Tibbets, 2017. "Job-to-Job Flows and Earnings Growth," American Economic Review, American Economic Association, vol. 107(5), pages 358-363, May.
    7. Clémence Berson & Marta de Philippis & Eliana Viviano, 2020. "Job-to-Job Flows and Wage Dynamics in France and Italy," Working papers 756, Banque de France.
    8. Bassanini, Andrea & Batut, Cyprien & Caroli, Eve, 2021. "Labor Market Concentration and Stayers' Wages: Evidence from France," IZA Discussion Papers 14912, Institute of Labor Economics (IZA).
    9. Bassanini, Andrea & Batut, Cyprien & Caroli, Eve, 2023. "Labor Market Concentration and Wages: Incumbents versus New Hires," Labour Economics, Elsevier, vol. 81(C).
    10. Julien Sauvagnat & Fabiano Schivardi, 2024. "Are Executives in Short Supply? Evidence from Death Events," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(1), pages 519-559.
    11. Aitken, Andrew & Singh, Shruti, 2023. "Time to change? Promoting mobility at older ages to support longer working lives," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    12. John C. Haltiwanger & Henry R. Hyatt & Lisa B. Kahn & Erika McEntarfer, 2018. "Cyclical Job Ladders by Firm Size and Firm Wage," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 52-85, April.
    13. Choi, Sekyu & Figueroa, Nincen & Villena-Roldán, Benjamin, 2020. "Wage Cyclicality Revisited: The Role of Hiring Standards," MPRA Paper 98240, University Library of Munich, Germany.
    14. Emin Dinlersoz & Henry Hyatt & Hubert Janicki, 2019. "Who Works for Whom? Worker Sorting in a Model of Entrepreneurship with Heterogeneous Labor Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 244-266, October.
    15. Sum Lo Simon Ming, 2023. "Desired work-leisure balance in a partial equilibrium job search model with multiple job holding," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-43, December.
    16. Lindberg, Kreg, 2024. "Worker income level, mobility, and income growth: A dynamic structural equation model," Annals of Tourism Research, Elsevier, vol. 105(C).
    17. Leland Crane & Henry Hyatt & Seth Murray, 2018. "Cyclical Labor Market Sorting," 2018 Meeting Papers 939, Society for Economic Dynamics.
    18. Jonathan Colmer & Eleanor Krause & Eva Lyubich & John Voorheis, 2024. "Transitional costs and the decline in coal: Worker-level evidence," CEP Discussion Papers dp2049, Centre for Economic Performance, LSE.
    19. Albagli, Elías & Contreras, Gabriela & Tapia, Matías & Wlasiuk, Juan M., 2022. "Earnings cyclicality of new and continuing jobs: The role of tenure and transition length," Labour Economics, Elsevier, vol. 78(C).
    20. David Wiczer, 2020. "Book Review for Not Working: Where Have All the Good Jobs Gone?," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 55(2), pages 95-97, April.

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    More about this item

    Keywords

    Job ladder; Business cycles; Real wage stagnation;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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