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Earnings Dynamics, Mobility Costs, and Transmission of Market-Level Shocks

Author

Listed:
  • Magne Mogstad

    (University of Chicago)

  • Bradley Setzler

    (University of Chicago)

  • Thibaut Lamadon

    (University of Chicago)

Abstract

We study the cost of workers reallocation between firms, industries and regions. Using IRS tax records on individuals’ earnings together with data on firms balance sheet, we estimate the pass-through of firm, region, and industry shocks to workers earnings. Using a stylized static model, link these pass-through estimates to costs of reallocating workers. Finally, we introduce long-term contracts and study the non-linear transmission of productivity shocks to earnings.

Suggested Citation

  • Magne Mogstad & Bradley Setzler & Thibaut Lamadon, 2017. "Earnings Dynamics, Mobility Costs, and Transmission of Market-Level Shocks," 2017 Meeting Papers 1483, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:1483
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    Cited by:

    1. James J. Heckman, 2019. "The Race Between Demand and Supply: Tinbergen’s Pioneering Studies of Earnings Inequality," De Economist, Springer, vol. 167(3), pages 243-258, September.
    2. Danny Yagan, 2019. "Employment Hysteresis from the Great Recession," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2505-2558.
    3. Lindner, Attila & Muraközy, Balázs & Reizer, Balázs & Schreiner, Ragnhild, 2022. "Firm-level technological change and skill demand," LSE Research Online Documents on Economics 117905, London School of Economics and Political Science, LSE Library.
    4. Patrick Kline & Neviana Petkova & Heidi Williams & Owen Zidar, 2019. "Who Profits from Patents? Rent-Sharing at Innovative Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(3), pages 1343-1404.
    5. Mons Chan & Ming Xu & Sergio Salgado, 2019. "Heterogeneous Passthrough from TFP to Wages," 2019 Meeting Papers 1447, Society for Economic Dynamics.

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