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Firmwide Versus Establishment-Specific Labor Market Practices

David S. Kaplan¹; Brooks Pierce²

¹ Instituto Tecnológico Autónomo de México · ² Bureau of Labor Statistics

We construct a novel data set matching occupational data from separate establishments to the establishments' corporate parents, in order to study labor market links across establishments within diverse firms. We find substantial wage components common to all establishments within firms, even after netting out industry and occupation effects. However, employment changes are localized to establishments. The data suggest that internal labor markets of multiestablishment firms are linked throughout their entire organizations, but that establishment-level demand shocks do not permeate the firm.

DOI

10.1162/0034653054638373

Volume

87 (3)

Pages

569-578

Language

en

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