Demiralp, Berna (2007): Occupational Self-Selection in a Labor Market with Moral Hazard.
Download (406kB) | Preview
This paper presents a model of occupational choice in a labor market characterized by moral hazard. The model demonstrates that in such a labor market, workers' occupational choices are determined by not only their comparative advantage but also their effort decisions in each occupation. The estimation results, based on data from the National Longitudinal Survey of Youth, suggest that workers' self-selection into white collar and blue collar occupations leads to higher wages and lower dismissal rates in both occupations. Furthermore, analysis results reveal that these effects of self-selection diminish as the labor market becomes increasingly characterized by moral hazard.
|Item Type:||MPRA Paper|
|Institution:||Old Dominion University|
|Original Title:||Occupational Self-Selection in a Labor Market with Moral Hazard|
|Keywords:||occupational choice; moral hazard; self-selection; dismissals|
|Subjects:||J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
|Depositing User:||Berna Demiralp|
|Date Deposited:||19. Mar 2007|
|Last Modified:||18. Feb 2013 10:15|
References  Bartel A., and G. Borjas, "Wage Growth and Job Turnover: An Empirical Analysis," in Sherwin Rosen, ed., Studies in Labor Markets (Chicago: University of Chicago Press, 1981), 65-84.  Borjas, George, "Self-Selection and the Earnings of Immigrants," American Economic Review 77:4 (1987), 531-553.  Demiralp, Berna, "A Model of Occupational Choice with Moral Hazard and Human Capital Accumulation," manuscript 2007.  Farber, Henry S.,"The Analysis of InterfirmWorker Mobility," Journal of Labor Economics 12 (1994), 554-593.  Farber, Henry S., "The Changing Face of Job Loss in the United States: 1981-1995," Brookings Papers on Economic Activity: Microeconomics (1997), 55-128.  Flinn, Christopher J., "EquilibriumWage and Dismissal Processes," Journal of Business and Economic Statistics 15 (1997), 221-236.  Gibbons, R. and L. Katz, "Layoffs and Lemons," The Review of Economic Studies 59:3 (1991), 515- 535.  Gould, Eric D., "Rising Wage Inequality, Comparative Advantage, and the Growing Importance of General Skills in the United States," Journal of Labor Economics 20:1 (2002), 105-147.  Heckman, James J., and Guilherme Sedlacek, "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-Selection in the Labor Market," Journal of Political Economy 93 (1985), 1077-1125.  Jovanovic, B., "Job Matching and the Theory of Turnover," Journal of Political Economy 87 (1979), 972-990.  Jovanonic, B., and R. Moffitt, "An Estimate of a Sectoral Model of Labor Mobility," Journal of Political Economy 98:4 (1990), 827-852. 36  Keane, M., and K.Wolpin, "The Career Decisions of YoungMen," Journal of Political Economy 105:3 (1997), 473-522.  McCall, Brian P., " Occupational Matching: A Test of Sorts," Journal of Political Economy 98:1 (1990), 45-69.  Miller, Robert A., "JobMatching and Occupational Choice," Journal of Political Economy 92:6 (1984), 1086-1120.  Moscarini, Giuseppe, "ExcessWorker Reallocation," Review of Economic Studies 68 (2001), 593-612.  Neal, Derek, "The Complexity of Job Mobility among Young Men," Journal of Labor Economics 17:2 (1999), 237-261.  Roy, Andrew D., "Some Thoughts on the Distribution of Earnings," Oxford Economic Papers 3 (1951), 135-146.  Sattinger, Michael, "Assignment Models of the Distribution of Earnings," Journal of Economic Literature 31:2 (1993), 831-880.  Shapiro, C., and J. Stiglitz, "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review 74 (1984), 433-444.  Topel, Robert, and Michael Ward, "Job Mobility and the Careers of Young Men," Quarterly Journal of Economics 107:2 (1992), 439-479.  Willis, Robert, "Wage Determinants: A Survey and Reinterpretation of Human Capital Earnings Functions," in O. Ashenfelter and R. Layard, eds., Handbook of Labor Economics (Amsterdam: North Holland, 1986).