Katz, LawrenceFarhi, EmmanuelChetty, RajStein, JeremySchoefer, Benjamin2015-07-172015-052015-05-212015Schoefer, Benjamin. 2015. The Financial Channel of Wage Rigidity. Doctoral dissertation, Harvard University, Graduate School of Arts & Sciences.http://nrs.harvard.edu/urn-3:HUL.InstRepos:17467250Why do firms cut hiring so sharply in recessions? This dissertation explores two answers. Chapters 1 and 2 propose a financial channel of wage rigidity, whereby wage rigidity among incumbent workers forces firms to reduce hiring by squeezing their internal funds. Chapter 3 examines how the procyclicality of quits, through the replacement vacancies they entail, amplifies the cyclical fluctuations of total job openings.application/pdfenEconomics, GeneralThesis or Dissertation