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Wage rigidity and job creation

Haefke, Christian, Sonntag, Marcus and van Rens, Thijs (2013) Wage rigidity and job creation. Journal of Monetary Economics, 60 (8). pp. 887-899. ISSN 0304-3932

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Identification Number: 10.1016/j.jmoneco.2013.09.003


Recent research in macroeconomics emphasizes the role of wage rigidity in accounting for the volatility of unemployment fluctuations. We use worker-level data from the CPS to measure the sensitivity of wages of newly hired workers to changes in aggregate labor market conditions. The wage of new hires, unlike the aggregate wage, is volatile and responds almost one-to-one to changes in labor productivity. We conclude that there is little evidence for wage rigidity in the data.

Item Type: Article
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Additional Information: © 2013 Elsevier B.V.
Divisions: LSE
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
Date Deposited: 01 Jul 2014 14:33
Last Modified: 20 Oct 2021 02:06
Projects: SEJ2005-01124, SEJ2006-02235, ECO2008-01665, 2009SGR-1157, ES/L500343/1
Funders: Jubiläumsfonds of the Austrian Central Bank, Spanish Ministry of Education and Sciences, Juán de la Cierva, Generalitat de Catalunya, DIUE grants Beatriu de Pinós, Barcelona GSE Research Network, Economic and Social Research Council

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