Productivity Shocks, Long-Term Contracts, and Earnings Dynamics

• 成果类型: Article
• 署名作者: Balke, Neele; Lamadon, Thibaut
• 署名单位: University of Chicago; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20161622
• 发表日期: 2022
• 页码: 2139-2177
• 关键词: equilibrium wage dispersion; implicit contracts; directed search; labor-market; moral hazard; TENURE; RISK; job; models; WORKER

摘要

This paper examines how employer- and worker-specific productivity shocks transmit to earnings and employment. We develop an equilibrium search model and characterize the optimal contract offered by firms. Risk-neutral firms provide partial insurance against shocks to risk-averse workers and offer contingent contracts, where payments are backloaded in good times and frontloaded in bad times. The model is estimated on matched employer-employee data from Sweden. Firms absorb persistent worker and firm shocks, with respective passthrough values of 26 and 10 percent. We evaluate the effects of redistributive policies and find that 30 percent of government insurance is undone by crowding out firm insurance.