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Firmwide Versus Establishment-Specific Labor Market Practices

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  • David S. Kaplan

    (Instituto Tecnolgico Autnomo de Mxico)

  • Brooks Pierce

    (U.S. Bureau of Labor Statistics)

Abstract

We construct a novel data set matching occupational data from separate establishments to the establishments' corporate parents, in order to study labor market links across establishments within diverse firms. We find substantial wage components common to all establishments within firms, even after netting out industry and occupation effects. However, employment changes are localized to establishments. The data suggest that internal labor markets of multiestablishment firms are linked throughout their entire organizations, but that establishment-level demand shocks do not permeate the firm. 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • David S. Kaplan & Brooks Pierce, 2005. "Firmwide Versus Establishment-Specific Labor Market Practices," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 569-578, August.
  • Handle: RePEc:tpr:restat:v:87:y:2005:i:3:p:569-578
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    References listed on IDEAS

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    1. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 819-863.
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    5. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
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    8. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
    9. Schmalensee, Richard, 1985. "Do Markets Differ Much?," American Economic Review, American Economic Association, vol. 75(3), pages 341-351, June.
    10. Erica L. Groshen, 1991. "Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 869-884.
    11. Bronars, Stephen G & Famulari, Melissa, 1997. "Wage, Tenure, and Wage Growth Variation within and across Establishment," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 285-317, April.
    12. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
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    1. repec:nos:vgmu00:2018:i:1:p:89-108 is not listed on IDEAS
    2. Richard Duhautois & Fabrice Gilles & Héloïse Petit, 2012. "Worker flows and establishment wage differentials : a breakdown of the relationship," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00833872, HAL.
    3. repec:scn:vgmu00:2018:i:1:p:89-108 is not listed on IDEAS

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