Working Paper: NBER ID: w23485
Authors: John Haltiwanger; Henry Hyatt; Lisa B. Kahn; Erika McEntarfer
Abstract: We study whether workers progress up firm wage and size job ladders, and the cyclicality of this movement. Search theory predicts that workers should flow towards larger, higher paying firms. However, we see little evidence of a firm size ladder, partly because small, young firms poach workers from all other businesses. In contrast, we find strong evidence of a firm wage ladder that is highly procyclical. During the Great Recession, this firm wage ladder collapsed, with net worker reallocation to higher wage firms falling to zero. The earnings consequences from this lack of upward progression are sizable.
Keywords: Job Mobility; Firm Size; Firm Wage; Cyclical Dynamics; Labor Market
JEL Codes: E24; E32; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Job mobility (J62) | Economic conditions (E66) |
| Job mobility (J62) | Upward mobility (J62) |
| Economic conditions (E66) | Upward mobility (J62) |
| Economic conditions (E66) | Earnings growth (O49) |
| Firm wage ladder (J31) | Job mobility (J62) |
| Poaching flows (K42) | High-wage firms growth (J39) |
| Job mobility (J62) | Low-wage firms employment loss (F66) |