Firm Performance and the Volatility of Worker Earnings / Chinhui Juhn, Kristin McCue, Holly Monti, Brooks Pierce.

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Juhn, Chinhui

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w23102.Publication details: Cambridge, Mass. National Bureau of Economic Research 2017.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Using linked employer-employee data for the U.S., we examine whether shocks to firm revenues are transmitted to the earnings of continuing employees. While full insurance is rejected, the elasticity of worker earnings with respect to persistent shocks in firm revenues is small and consistent with the notion that firms insulate workers from idiosyncratic shocks. Exploring heterogeneity of effects, we find the largest elasticity in professional services, among employees in the top 5% of their employers' earnings distribution, suggesting that in certain jobs performance pay may be a countervailing force to wage insurance.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w23102 (Browse shelf(Opens below))	Not For Loan

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January 2017.

Using linked employer-employee data for the U.S., we examine whether shocks to firm revenues are transmitted to the earnings of continuing employees. While full insurance is rejected, the elasticity of worker earnings with respect to persistent shocks in firm revenues is small and consistent with the notion that firms insulate workers from idiosyncratic shocks. Exploring heterogeneity of effects, we find the largest elasticity in professional services, among employees in the top 5% of their employers' earnings distribution, suggesting that in certain jobs performance pay may be a countervailing force to wage insurance.