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Title: High-Skilled Labor Cyclicality and the Role of Pay Type

Citation Type: Miscellaneous

Publication Year: 2023

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Abstract: The cyclical volatility of hours per worker is lower among college graduates than those without a college degree. I show empirically that accounting for pay type reduces this volatility gap by 44%. Non-college graduates are more than twice as likely to be paid by the hour, and hourly workers have more cyclically volatile hours per worker than salaried workers. The cyclical volatility of employment, by contrast, is higher for salaried workers. Using a model with search and matching in which a matched worker and firm bargain over the intensive hours margin, I show how pay type itself can lead to hours per worker being more volatile among hourly workers. Pay stickiness hinders worker and firm from adjusting hours in response to productivity changes, and a sticky salary is a larger impediment than a sticky wage.

Url: https://mattjbush.github.io/files/JMP.pdf

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Authors: Bush, Matthew

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Data Collections: IPUMS CPS

Topics: Education, Labor Force and Occupational Structure

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