NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Cyclical Job Ladders by Firm Size and Firm Wage

John Haltiwanger, Henry Hyatt, Lisa B. Kahn, Erika McEntarfer

NBER Working Paper No. 23485
Issued in June 2017
NBER Program(s):   EFG   LS

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.

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Document Object Identifier (DOI): 10.3386/w23485

 
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