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Labor market effects of monetary policy across workers and firms

Author

Listed:
  • Gulyas, Andreas
  • Meier, Matthias
  • Ryzhenkov, Mykola
Abstract
This paper uses Austrian social security records to analyze the effects of ECB monetary policy on the labor market. Our focus is on the role of worker and firm wage components, defined by an Abowd et al. (1999) wage regression. We find that monetary tightening causes the largest employment losses for low-paid workers who are employed in high-paying firms before the tightening. Monetary tightening further causes a reallocation of workers to lower-paying firms. In particular low-paid workers who were originally employed by low-paying firms are prone to falling down the firm wage ladder.

Suggested Citation

  • Gulyas, Andreas & Meier, Matthias & Ryzhenkov, Mykola, 2024. "Labor market effects of monetary policy across workers and firms," European Economic Review, Elsevier, vol. 166(C).
    • Handle: RePEc:eee:eecrev:v:166:y:2024:i:c:s0014292124000850
    DOI: 10.1016/j.euroecorev.2024.104756
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    More about this item

    Keywords

    Monetary policy; Worker reallocation; Heterogeneity; AKM;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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