TY  - BOOK
AU  - 2024
AU  - Fongoni, Marco
TI  - Asymmetric Reciprocity and the Cyclical Behavior of Wages, Effort, and Job Creation
SN  - 1945-7707
PB  - American Economic Journal: Macroeconomics
KW  -  Aggregate Human Capital
KW  -  Aggregate Labor Productivity, Business Fluctuations
KW  -  Employment
KW  -  Intergenerational Income Distribution
KW  -  Wages
KW  - Unemployment
N2  - 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
UR  - https://www.aeaweb.org/articles?id=10.1257/mac.20200321
ER  -