Does Wage Persistence Matter for Employment Fluctuations? Evidence from Displaced Workers
利用1984-2006年失业工人调查数据，发现好劳动力市场带来的工资增长在失业后消失，且高工资工人面临更高失业风险，表明工资刚性影响就业波动。
Previous literature has found that tight labor market conditions during a job raise wages. Using the Displaced Worker Survey from 1984 to 2006, we show that wage gains associated with good labor market conditions disappear at job loss. We also find that workers with higher wages due to tight past labor market conditions face higher risk of layoff. These findings suggest an important role of persistent rigidities in the wage setting process that are related to layoff decisions. This supports the notion that downward rigid employment contracts help explain the Shimer (2005) “puzzle” of low wage relative to employment fluctuations.