Search Results
Discussion Paper
Wage Pressures in the Labor Market: What Do They Say?
Wage pressures among the newly employed in low-wage service occupations appear to be the result of normal economic forces, likely reflecting demand surges for—and a reluctant supply of—workers in occupations particularly hard hit by pandemic-induced economic shutdowns.
Discussion Paper
Wage Pressures in the Labor Market: What Do They Say?
Wage pressures among the newly employed in low-wage service occupations appearto be the result of normal economic forces, likely reflecting demand surges for—and areluctant supply of—workers in occupations particularly hard hit by pandemic-inducedeconomic shutdowns.
Journal Article
Wage Pressures in the Labor Market: What Do They Say?
Wage pressures among the newly employed in low-wage service occupations appear to be the result of normal economic forces, likely reflecting demand surges for—and a reluctant supply of—workers in occupations particularly hard hit by pandemic-induced economic shutdowns.
Working Paper
The Shift to Remote Work Lessens Wage-Growth Pressures
The recent shift to remote work raised the amenity value of employment. As compensation adjusts to share the amenity-value gains with employers, wage-growth pressures moderate. We find empirical support for this mechanism in the wage-setting behavior of US employers, and we develop novel survey data to quantify its force. Our data imply a cumulative wage-growth moderation of 2.0 percentage points over two years. This moderation offsets more than half the real-wage catchup effect that Blanchard (2022) highlights in his analysis of near-term inflation pressures. The amenity-values gains ...
Working Paper
Recent Employment Growth in Cities, Suburbs, and Rural Communities
This paper uses a comprehensive source of yearly data to study private-sector labor demand across US counties during the past five decades. Our focus is on how employment levels and earnings relate to population density—that is, how labor markets in rural areas, suburbs, and cities have fared relative to one another. Three broad lessons emerge. First, the longstanding suburbanization of employment and population in cities with very dense urban cores essentially stopped in the first decade of the 21st century. For cities with less dense cores, however, the decentralization of employment ...
Working Paper
Organizations, Skills, and Wage Inequality
We extend an on-the-job search framework in order to allow firms to hire workers with different skills and skills to interact with firms? total factor productivity (TFP). Our model implies that more productive firms are larger, pay higher wages, and hire more workers at all skill levels and proportionately more at higher skill types, matching key stylized facts. We calibrate the model using five educational attainment levels as proxies for skills and estimate nonparametrically firm-skill output from the wage distributions for different educational levels. We consider two periods in time (1985 ...
Working Paper
Downward Nominal Wage Rigidity in the United States during and after the Great Recession
Rigidity in wages has long been thought to impede the functioning of labor markets. One recent strand of the research on wage flexibility in the United States and elsewhere has focused on the possibility of downward nominal wage rigidity and what implications such rigidity might have for the macroeconomy at low levels of inflation. The Great Recession of 2008-09, during which the unemployment rate topped 10 percent and price deflation was at times seen as a distinct possibility, along with the subsequent slow recovery and persistently low inflation, has added to the relevance of this line of ...
Working Paper
Determinants of Expected Returns at Public Defined-Benefit Pension Plans
Estimated expected returns are important for pension plans, as they influence many plan characteristics including required asset levels, annual contributions, and the extent of plan under- or overfunding. Yet, there seems to be little prior literature on the factors influencing these estimated future returns. In an attempt to fill this gap, this paper presents the results of a panel analysis of data on the determinants of such returns used by US public defined-benefit (DB) pension plans for the period 2001?2011. As expected, we find that real return estimates by DB public pension funds are ...
Working Paper
Firms, Skills, and Wage Inequality
We present a model with search frictions and heterogeneous agents that allows us to decompose the overall increase in US wage inequality in the last 30 years into its within- and between-firm and skill components. We calibrate the model to evaluate how much of the overall rise in wage inequality and its components is explained by different channels. Output distribution per firm-skill pair more than accounts for the observed increase over this period. Parametric identification implies that the worker-specific component is responsible for 85 percent of this, compared to 15 percent that is ...
Working Paper
Downward Nominal Wage Rigidity in the United States during and after the Great Recession
Rigidity in wages has long been thought to impede the functioning of labor markets. In this paper, we investigate the extent of downward nominal wage rigidity in US labor markets using job-level data from a nationally representative establishment-based compensation survey collected by the Bureau of Labor Statistics. We use several distinct methods to test for downward nominal wage rigidity and to assess whether such rigidity is less or more severe in the presence of negative economic shocks than in more normal economic times. We find a significant amount of downward nominal wage rigidity in ...