Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/177118 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11314
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In this paper, we analyze the connection between value added, wages, and labor market flows at the establishment level. We develop a simple model to illustrate the expected comovement of these variables. For the empirical analysis, we link the new German Administrative Wage and Labor Market Flow Panel (AWFP) dataset to the IAB Establishment Panel. We show that establishments' hires rates have a positive and separations rates a negative comovement with establishment-specific value added, whereby hires react by more than separations. In addition, we provide evidence that establishments' partial equilibrium reaction is an important driver for aggregate labor market dynamics.
Subjects: 
labor market flows
value added
wages
administrative data
establishments
JEL: 
E24
E32
J64
Document Type: 
Working Paper

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