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A theory of turnover and wage dynamics

Li, Jin and Yu, Jun (2016) A theory of turnover and wage dynamics. Economic Inquiry, 55 (1). pp. 223-236. ISSN 0095-2583

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Identification Number: 10.1111/ecin.12384

Abstract

We develop a model of turnover and wage dynamics with insurance, match-specific productivity, and long-term contracting. The model predicts that wages are downward rigid within firms but can decrease when workers are fired. We apply the model to study the impact of business cycles on subsequent wages and job mobility. Workers hired during a boom have persistent higher future wages if staying with the same firm. However, these boom hires are more likely to be terminated and have shorter employment spells.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2017 John Wiley & Sons
Divisions: Management
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Sets: Departments > Management
Date Deposited: 10 Oct 2017 16:20
Last Modified: 20 Jan 2020 06:14
URI: http://eprints.lse.ac.uk/id/eprint/84561

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