Various reasons have been put forward to explain the stylized fact that the wages of job starters are more procyclical than the wages of workers who don’t change jobs. I explore the theoretical and empirical basis for one such reason: firms adjust the quality of workers assigned to jobs over the business cycle. I show that there is evidence that quality adjustment is an important feature of cyclical adjustment in labor markets. New hires of any particular ability level get lower quality jobs in recessions than in booms. The results indicate that about half of the wage procyclicality of new hires can be ascribed to variation in the matches between firms and workers over the business cycle. These systematic changes in assignment imply that government policy aimed at high-skill sectors can have positive effects on low-skill individuals by increasing the probability that they upgrade occupation and industry.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Volume (Year): 70 (2004) Issue (Month): 3 (January) Pages: 600-615 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
For technical questions regarding this item, or to correct its listing, contact: (Laura Razzolini).
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)