TY  - RPRT
        AU  - Kudlyak, Marianna
        TI  - How Cyclical Is the User Cost of Labor?
        PY  - 2024/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16888
        UR  - https://www.iza.org/publications/dp16888
        AB  - In employment relationships, a wage is an installment payment on an implicit long-term agreement between a worker and a firm. The price of labor that impacts firm's hiring decisions, instead, reflects the hiring wage as well as the impact of economic conditions at the time of hiring on future wages. Measured by the labor's user cost, the price of labor is substantially more pro-cyclical than the new-hire wage or the average wage. The strong procyclicality of the price of labor calls for other forces for cyclical labor demand to explain employment fluctuations.
        KW  - unemployment
KW  - wage rigidity
KW  - user cost of labor
KW  - wages
KW  - cyclicality
        ER  -