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on Labour Economics |
| By: | Fujita, Shigeru (Federal Reserve Bank of Philadelphia) |
| Abstract: | Supersedes Working Paper 11-44\R. The purpose of this paper is to identify possible sources of the secular decline in the job separation rate over the past four decades. I use a simple labor matching model with two types of workers, experienced and inexperienced, where the former type faces a risk of skill loss during unemployment. When the skill loss occurs, the worker is required to restart his career and thus suffers a drop in his wage. I show that a higher risk of skill loss results in a lower separation rate. The key mechanism is that the experienced workers accept lower wages in exchange for keeping their jobs. |
| Keywords: | Separation Rate; Wage Loss; Turbulence |
| JEL: | E24 J31 J64 |
| Date: | 2015–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:15-29&r=lab |
| By: | Liu, Kai (Norwegian School of Economics) |
| Abstract: | I address the causes of the gender wage gap with a new dynamic model of wage, hours, and job changes that permits me to decompose the gap into a portion due to gender differences in preferences for hours of work and in constraints. The dynamic model allows the differences in constraints to reflect possible gender differences in job arrival rates, job destruction rates, the mean and variance of the wage offer distribution, and the wage cost of part-time work. The model is estimated using the 1996 panel of the Survey of Income and Program Participation. I find that the preference for part-time work increases with marriage and number of children among women but not among men. These demographic factors explain a sizable fraction of the gender gap in employment, but they explain no more than 6 percent of the gender wage gap. Differences in constraints, mainly in the form of the mean offered wages and rates of job arrival and destruction, explain most of the gender wage gap. Policy simulation results suggest that, relative to reducing the wage cost of part-time work, providing additional employment protection to part-time jobs is more effective in reducing the gender wage gap. |
| Keywords: | gender gap, job mobility, part-time work |
| JEL: | D91 J31 J16 J63 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9255&r=lab |
| By: | Hansen, Jörgen (Concordia University); Lkhagvasuren, Damba (Concordia University) |
| Abstract: | We present new evidence on the wage and mobility of young and old workers, which is difficult to explain using standard human capital theory. Instead, we propose a simple dynamic extension of the Roy model, where worker migration and wages are jointly determined at the individual level. According to this model, a higher moving cost among older workers is the main factor driving the lower mobility among this group. Because of the higher moving costs, older workers require a higher wage increase to move across regions than younger workers, a pattern that is consistent with individual-level U.S. data. We also find an interesting dynamic effect suggesting that, given a persistent labor income shock, a higher future moving cost makes workers more mobile today. |
| Keywords: | geographic mobility, labor mobility by age, labor income shock, moving cost, multi-sector model |
| JEL: | E24 J31 J61 R23 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9258&r=lab |
| By: | Gu, Emily (Department of Economics, Colgate University); Sparber, Chad (Department of Economics, Colgate University) |
| Abstract: | Studies estimating the consequences of immigration on wages paid to native-born workers often uncover small to nonexistent effects when using cross city or state variation (the “spatial approachâ€) but large deleterious effects when using variation across education-by-experience cells (the “national approachâ€). One mechanism of labor market adjustment emphasized in the spatial approach is that native-born workers respond to immigration by specializing in occupations demanding skills in which they have a comparative advantage, thereby helping to protect themselves from labor market competition and wage losses. This paper examines whether the national approach also identifies this skill response. We find evidence that such a response does occur, which reduced the magnitude of within-cell wage effects by more than 20%. |
| Keywords: | Immigration, Occupational Skills |
| JEL: | F22 J24 J61 J31 |
| Date: | 2015–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:cgt:wpaper:2015-04&r=lab |
| By: | Andreas Thiemann |
| Abstract: | This paper uses administrative data to investigate how a change in pension wealth affects a mother’s employment decision after child birth. I exploit the extension of the child care pension benefit in 1992 as a natural experiment in a regression discontinuity design to estimate short- and medium-run employment effects. In comparison to most family benefits, the child care pension benefit is accumulated upon child birth but only becomes effective on the verge of retirement. Hence, the employment response depends on how a mother discounts future pension benefits. The results suggest that the change in pension wealth does not affect maternal employment, which is not in line with a forward looking rational behavior. Therefore, the child care pension benefit increases maternal old-age income without causing negative employment reactions. |
| Keywords: | Natural experiment, female labor supply, pension benefit |
| JEL: | J13 H55 D19 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1499&r=lab |
| By: | Alicia H. Munnell; Anthony Webb; Anqi Chen |
| Abstract: | Working longer is a powerful lever to enhance retirement security. Individuals should be able to extend the number of years they work because, on average, they are healthier, live longer, and face less physically demanding jobs. But averages are misleading when discrepancies in health, job prospects, and life expectancy have widened between individuals with low and high socioeconomic status (SES). To understand the magnitude of the problem, this paper, using data from the Health and Retirement Study, specifies how much longer households in each SES quartile would need to work to maintain their pre-retirement standard of living and compares those optimal retirement ages with their planned retirement ages to calculate a retirement gap. It then uses regression analysis to explore whether the gap reflects poor circumstances or poor planning – that is, the extent to which the retirement gap results from health, employment, and marital shocks that occur before the HRS interview but too late for the household to adjust saving (between ages 50 and 58), as opposed to a gap resulting from inadequate foresight. The analysis shows that households in lower-SES quartiles have larger retirement gaps, and this pattern remains true even after controlling for late-career shocks. In short, the most vulnerable have the largest retirement gaps, and these gaps arise from poor planning rather than late-career shocks. |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2015-19&r=lab |