In its February 1 article, “The Price of Getting Back to Work,” British newsmagazine The Economist cited a working paper co-authored by University of Rochester Professors Mark Bils and Yongsung Chang and Yonsei Professor Kim Sun-bin to explain the phenomenon of jobless recovery in the American economy.  Their paper,“How Sticky Wages in Existing Jobs Can Affect Hiring,” was published in January by the National Bureau of Economic Research, the largest economics research organization in the United States.
In analyzing the differences between economic recovery from the global recession in the U.S. and U.K., The Economist article suggests that a higher inflation rate in Britain may be the reason for its job-filled recovery, as opposed to the jobless one in America.  That is, the higher annual inflation in the U.K. (more than 3%) means that real wages have declined 7.8% since the end of 2007; as such, the article contends, the employment rate has risen because “British workers became cheaper relative to the prices of goods and services.”  In the United States, however, where inflation has been much milder, real wages have increased by nearly 2%, while employment growth has been weak. 
To understand the reasons for this “jobless recovery” in America, The Economist article draws upon the research paper of Professors Kim, Bils, and Chang into the relationship between inflexible (or “sticky”) wages and industry hiring practices.  According to their paper, during a recession firms with sticky wages respond to weakening demand by requiring workers to increase their productivity, which lowers the real cost of employing a worker.  And with rising productivity and reduced demand, Professor Kim and his co-authors point out, industry has little incentive to hire more workers.  They also argue “that when sticky wages are a constraint, a given shock to demand should produce a large drop in employment.”  Citing these conclusions put forth in “Sticky Wages,” The Economist article sums up the reasons for these respective jobless and job-filled recoveries:  “In America low inflation impeded wage adjustment, leading to rising productivity and weak employment growth. In Britain higher inflation kept wages in check, encouraging firms to hire despite weak demand.” 
Professor Kim is a graduate of Korea University, and he earned his Ph.D. in Economics from the University of Pennsylvania.  Prior to becoming Professor of Economics at Yonsei in 2008, he served as an assistant professor at Concordia University in Montreal and associate professor at Korea University.  In 2013, Professor Kim received the “Chung-Ram Prize” awarded each year by the Korea Economic Association to a distinguished economics researcher forty-five years old or younger.