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The vanishing procyclicality of labor productivity
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Galí, Jordi and Van Rens, Thijs (2015) The vanishing procyclicality of labor productivity. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (TWERPS), Volume 2015 (Number 1062). (Unpublished)
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
We document three changes in postwar US macroeconomic dynamics: (i) the procyclicality of labor productivity vanished, (ii) the relative volatility of employment rose, and (iii) the relative (and absolute) volatility of the real wage rose. We propose an explanation for all three changes that is based on a common source: the decline in labor market turnover, which reduced hiring frictions. We develop a simple model with hiring frictions, variable e§ort, and endogenous wage rigidities
to illustrate the mechanisms underlying our explanation. We show that the decline in turnover may also have contributed to the observed decline in output volatility.
Item Type: | Working or Discussion Paper (Working Paper) | ||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce |
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Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Labor turnover, Labor market, Employee selection, Wages and labor productivity | ||||||||
Series Name: | Warwick economics research papers series (TWERPS) | ||||||||
Publisher: | University of Warwick. Department of Economics | ||||||||
Place of Publication: | Coventry | ||||||||
Official Date: | 2015 | ||||||||
Dates: |
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Volume: | Volume 2015 | ||||||||
Number: | Number 1062 | ||||||||
Number of Pages: | 46 | ||||||||
Institution: | University of Warwick | ||||||||
Status: | Not Peer Reviewed | ||||||||
Publication Status: | Unpublished | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Funder: | European Research Council (ERC), Spain. Ministerio de Ciencia e Innovación (MICINN), Comissionat per Universitats i Recerca de la Generalitat de Catalunya (CURGC), Barcelona Graduate School of Economics | ||||||||
Grant number: | SEJ2006-02235 (MICINN), ECO2008-01665 (MICINN), CSD2006-00016 (MICINN), 2009SGR-1157 (CURGC) |
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