Labor Market Competition and Employment Adjustment over the Business Cycle

2020/04/09 by Douglas A. Webber, Douglas Webber · 2 citations
Economics, Econometrics and Finance · Health Professions · #Labor market dynamics and wage inequality #Employment and Welfare Studies #Firm Innovation and Growth

paper · pdf · doi:10.3368/jhr.monopsony.0119-9954r1

Abstract

Using linked employer-employee data which covers the majority of U.S. employment, I examine how frictions in the labor market have evolved over time. I estimate that the labor supply elasticity to the rm declined signicantly (1.20 to 1.01) since the late 1990's, with the steepest declines occurring during the nancial crisis. I nd that this decline in labor market competition led to at least a 4 percent drop in earnings for the average worker.

Citations

• Search-Theoretic Models of the Labor Market: A Survey

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