Cyclical Job Ladders by Firm Size and Firm Wage

61 Pages Posted: 13 Jun 2017  

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Henry R. Hyatt

U.S. Census Bureau - Center for Economic Studies

Lisa Kahn

Yale School of Management

Erika McEntarfer

U.S. Census Bureau

Date Written: June 2017

Abstract

We study whether workers progress up firm wage and size job ladders, and the cyclicality of this movement. Search theory predicts that workers should flow towards larger, higher paying firms. However, we see little evidence of a firm size ladder, partly because small, young firms poach workers from all other businesses. In contrast, we find strong evidence of a firm wage ladder that is highly procyclical. During the Great Recession, this firm wage ladder collapsed, with net worker reallocation to higher wage firms falling to zero. The earnings consequences from this lack of upward progression are sizable.

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Suggested Citation

Haltiwanger, John and Hyatt, Henry R. and Kahn, Lisa and McEntarfer, Erika, Cyclical Job Ladders by Firm Size and Firm Wage (June 2017). NBER Working Paper No. w23485. Available at SSRN: https://ssrn.com/abstract=2984662

John C. Haltiwanger (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3504 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER) ( email )

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Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
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Germany

Henry R. Hyatt

U.S. Census Bureau - Center for Economic Studies ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Lisa Kahn

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Erika McEntarfer

U.S. Census Bureau ( email )

4600 Silver Hill Road
Washington, DC 20233
United States

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