Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173042
Authors: 
Schaefer, Daniel
Singleton, Carl
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6766
Abstract: 
Using employer-employee panel data, we provide novel facts on how real wages and working hours within jobs responded to the UK’s Great Recession. In contrast to previous studies, our data enables us to address the cyclical composition of jobs. We show that firms were able to respond to the Great Recession with substantial real wage cuts and by recruiting more part-time workers. A one percentage point increase in the unemployment rate led to an average decline in real hourly wages of 2.8 per cent for new hires and 2.6 per cent for job stayers. Hours of new hires in entry-level jobs were also substantially procyclical, while job-stayer hours were nearly constant. Our findings suggest that models assuming rigid labour costs of new hires are not helpful for understanding the behaviour of unemployment over the business cycle.
Subjects: 
wage rigidity
Great Recession
hours worked
job-level analysis
JEL: 
E24
E32
J31
Document Type: 
Working Paper

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