Table 3
Decomposition of the Difference in the Firm-Level Labor Supply Elasticity
| Component | Routine Workers’ Estimated Firm-Level Labor Supply Elasticity | Change in Percent of the Routine – NRC Difference in the Labor Supply Elasticity | NRM Workers’ Estimated Firm-Level Labor Supply Elasticity | Change in Percent of the NRM – NRC Difference in the Labor Supply Elasticity |
|---|---|---|---|---|
| Routine/NRM workers’ estimated firm-level labor supply elasticity | 1.696 | 1.659 | ||
| … when using NRC workers’ estimated separation rate elasticity to employment (ϵe sw) | 1.188 | -68.83 | 1.263 | -56.49 |
| … when additionally using NRC workers’ estimated separation rate elasticity to nonemployment (ϵn sw) | 0.989 | -26.97 | 1.056 | -29.53 |
… when additionally using NRC workers’ estimated wage elasticity of the share of hires from employment  | 0.897 | -12.50 | 0.809 | -35.28 |
| … when additionally using NRC workers’ estimated share of hires from employment ( = NRC workers’ estimated labor supply elasticity) (θ) | 0.958 | +8.30 | 0.958 | +21.30 |
Source: SIAB and BHP 1985–2014. Authors’ calculations.
Notes: The decomposition is based on estimates from Table 2. NRM, nonroutine manual; NRC, nonroutine cognitive.