Abstract

This paper studies the long-term effects of the business cycle on workers' future promotions and wages. Using the Swedish employer-employee matched data, we find that a cohort of workers entering the labor market during a boom gets promoted faster and reaches higher ranks. This procyclical promotion cohort effect persists even after controlling for workers' initial jobs, and explains at least half of the wage cohort effects that previous studies have focused on. We repeat the same analyses using personnel records from a single U.S. company, and obtain the same qualitative results.

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Additional Information

ISSN
1548-8004
Print ISSN
0022-166X
Pages
pp. 772-808
Launched on MUSE
2012-04-04
Open Access
No
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