Abstract
This paper uses a measure of skill mismatch to separate wage flexibility from confounding variation in wages driven by differences in job quality over the business cycle. I first show that the high cyclicality of job switchers' wages goes beyond cyclical movements in skill mismatch. Then I uncover large differences in wage cyclicality across the skill mismatch distribution. Among incumbent workers, wages are acyclical in good matches but procyclical in poor matches, in particular for overqualified workers. ( JEL E32, J24, J31, J41)
Original language | English |
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Pages (from-to) | 425-442 |
Number of pages | 25 |
Journal | American Economic Review: Insights |
Volume | 4 |
Issue number | 4 |
DOIs | |
Publication status | Published - Dec 2022 |