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.
Original language | English |
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Number of pages | 25 |
Journal | American Economic Review: Insights |
Volume | 4 |
Issue number | 4 |
DOIs | |
Publication status | Published - Dec 2022 |