TY  - RPRT
        AU  - Kim, Seula
        TI  - Workers' Job Prospects and Young Firm Dynamics
        PY  - 2025/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17655
        UR  - https://www.iza.org/publications/dp17655
        AB  - This paper investigates how worker beliefs and job prospects impact the wages and growth of young firms, as well as the aggregate economy. Building a heterogeneous-firm directed search model where workers gradually learn about firm types, I find that learning generates endogenous wage differentials for young firms. High-performing young firms must pay higher wages than equally high-performing old firms, while low-performing young firms offer lower wages than equally low-performing old firms. Reduced uncertainty or labor market frictions lower the wage differentials, thereby enhancing young firm dynamics and aggregate productivity. The results are consistent with U.S. administrative employee-employer matched data.
        KW  - Wage Differentials
KW  - Firm Dynamics
KW  - Learning
KW  - Search Frictions
KW  - Uncertainty
        ER  -