“…Our empirical evidence is particularly well suited to discipline structural models of earnings dynamics that incorporate firm dynamics. Regarding this point, an active literature studies models of hiring and wage‐setting in the labor market where firms experience stochastic shocks that lead them to grow or shrink over time (e.g., Kaas and Kircher (2015), Coles and Mortensen (2016), Gouin‐Bonenfant (2018), Bilal, Engbom, Mongey, and Violante (2019), Elsby and Gottfries (2022)). However, there is limited evidence—beyond the literature on the wage‐productivity pass‐through (see Card, Cardoso, Heining, and Kline (2018) for a recent review of the empirical evidence)—on how the earnings of workers correlate with the employment dynamics of their employers.…”