Firm Performance and the Volatility of Worker Earnings

Abstract

for helpful comments on an earlier version. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, or the National Bureau of Economic Research. All results have been reviewed to ensure that no confidential information is disclosed. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Productivity dispersion, wage dispersion and superstar firms

“…See Layard et al (2009) for a review of models with search costs, efficiency wage, union bargaining and rent sharing. 4 This is in line with evidence on imperfect propagation of productivity shocks to wages (Juhn et al 2018;Berger et al 2022;Kline et al 2019). 5 Two factors are typically cited as potential explanations: globalization (Helpman 2016) and technological change (Acemoglu and Autor 2011).…”

“…44 This is in line with evidence on imperfect propagation of productivity shocks to wages (Juhn et al . 2018; Berger et al . 2022; Kline et al .…”

Minimum Wages and Insurance within the Firm

“…We find that the relatively larger pass-through applies almost indistinguishably to the two groups of workers. Second, we exclude the workers at the top 20% of the wage distribution, to provide further evidence that bonuses, top-ups, or heterogeneity in job performance at the top end of the wage distribution (Juhn et al, 2018) are not driving our result.…”

The Long-Term Earnings’ Effects of a Credit Market Disruption

“…Finally, our paper contributes to the literature that studies the extent to which shocks to firms' performance are transmitted to their employees' labor income (for instance, Blanchflower et al, 1996;Guiso et al, 2005;Card et al, 2015Card et al, , 2014Macis and Schivardi, 2016;Juhn et al, 2018;Schoefer, 2021). We add to this literature by showing that employees who separate from the original firm bear a much larger cost than those who stay in the firm, both in the short and in the long term.…”