The productivity‐driven Mortensen–Pissarides model predicts that labor productivity is strongly correlated with labor market variables whereas these correlations were argued to be much weaker in the data, especially since the 1980s. We first document that the size of these discrepancies...

This paper presents an empirical analysis of changes in individual earnings and hours over time. Using longitudinal data from three panel surveys,we catalogue the main features of the covariance structure of changes in earnings and hours. We then present an interpretation of these features in...

This paper presents an empirical analysis of changes in individual earnings and hours over time. Using longitudinal data from three panel surveys,we catalogue the main features of the covariance structure of changes in earnings and hours. We then present an interpretation of these features in...