On the Cyclicality of Real Wages and Employment: New Evidence and Stylized Facts from Performance Pay and Fixed Wage Jobs

Abstract Using the National Compensation Survey between 2004 and 2017, we document four stylized facts quantify cyclical heterogeneity among performance pay (PP) fixed wage (FW) jobs. First, there is substantial dispersion in incidence of PP, even within same occupation; hourly compensation growth PP jobs has been nearly three-times as large that FW jobs; share increasing employer size; provision largely a firm-level decision. Second, find increases (decreases) response to state employment growth. Furthermore, respond primarily by adjusting extensive margin employment. Our estimates are identified off comparisons similar establishment over time. These business cycle dynamics consistent with models feature organizational practices, allowing firms adjust uncertainty under flexibility contracts. (JEL J21, J22, J31, E32, M55).