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Turbulent firms, turbulent wages?

  • Comin, Diego
  • Groshen, Erica L.
  • Rabin, Bess

Has greater turbulence among firms fueled rising wage instability in the U.S.? We find strong support for the hypothesis that rising turbulence in the sales of large publicly-traded U.S. firms over the past three decades has raised their workers' high-frequency wage volatility. Through controls and instrumental variable probes, we rule out straightforward compositional churning as an explanation for the link between firm sales and wage volatility. We also observe that the relationship between sales and wage volatility at the firm level is stronger since 1980, is present only in large companies and is stronger in services than in manufacturing companies.

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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 56 (2009)
Issue (Month): 1 (January)
Pages: 109-133

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Handle: RePEc:eee:moneco:v:56:y:2009:i:1:p:109-133
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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