Wage Cyclicality and Labor Market Sorting

Ana Gomes Figueiredo Varatojo dos Santos

Research output: Contribution to journalArticleAcademicpeer-review

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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 languageEnglish
Pages (from-to)425-442
Number of pages25
JournalAmerican Economic Review: Insights
Volume4
Issue number4
DOIs
Publication statusPublished - Dec 2022

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