蝌蚪网 Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Asymmetric Reciprocity and the Cyclical Behavior of Wages, Effort, and Job Creation
蝌蚪网 Journal: Macroeconomics
vol. 16,
no. 3, July 2024
(pp. 52–89)
Abstract
This paper develops a search and matching framework in which workers are characterized by asymmetric reference-dependent reciprocity and firms set wages by considering the effect that these can have on workers' effort and, therefore, on output. The cyclical response of effort to wage changes can considerably amplify shocks, independently of the cyclicality of the hiring wage, which becomes irrelevant for unemployment volatility, and firms' expectations of downward wage rigidity in existing jobs increases the volatility of job creation. The model is consistent with evidence on hiring and incumbents' wage cyclicality, and provides novel predictions on the dynamics of effort.Citation
Fongoni, Marco. 2024. "Asymmetric Reciprocity and the Cyclical Behavior of Wages, Effort, and Job Creation." 蝌蚪网 Journal: Macroeconomics 16 (3): 52–89. DOI: 10.1257/mac.20200321Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E32 Business Fluctuations; Cycles
- J23 Labor Demand
- J31 Wage Level and Structure; Wage Differentials
- J41 Labor Contracts
- J64 Unemployment: Models, Duration, Incidence, and Job Search