Firms' Internal Networks and Local Economic Shocks

Abstract

Gallen, and the NBER Summer Institute for helpful comments. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. 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 They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Internal Labor Markets, Wage Convergence, and Investment

“…This implies a 2.24% increase in wages when the wages of workers in other divisions and states in which the firm operates suffer a 10% increase as a result of the evolution of minimum wages in their state. These results also suggest that the network structure of internal labor markets can act as a propagation mechanism for local economic shocks (Giroud and Mueller (2019)).…”

The Timing of Mass Layoff Episodes: Evidence from U.S. Microdata

“…In the micro literature, Giroud and Mueller (2017) find that multi-establishment firms reduce the extent to which local demand shocks impact a single establishment's employment but, in doing so, spread some of the effects across other establishments and locations. While their paper looks at the ways in which local shocks impact a company's employment decisions over a multi-year horizon, my paper looks at the ways in which firm-specific shocks impact a company's propensity to announce mass layoffs on a quarterly basis.…”