Jung, Philip and Kuhn, Moritz (2012): Earnings losses and labor mobility over the life-cycle.
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An extensive empirical literature has documented that workers with high tenure suffer large and persistent earnings losses when they get displaced. We study the reasons behind these losses in a tractable search model with a life-cycle dimension, endogenous job mobility, worker- and match-heterogeneity. The model reconciles key characteristics of the U.S. labor market: large average transition rates, a large share of stable jobs, and the earnings losses from displacement. We decompose the earnings losses and find that only 50% result from skill losses. Endogenous reactions and selection account for the remainder. Our findings have important implications for the welfare costs of displacement and labor market policy.
|Item Type:||MPRA Paper|
|Original Title:||Earnings losses and labor mobility over the life-cycle|
|English Title:||Earnings losses and labor mobility over the life-cycle|
|Keywords:||Earnings Losses; Life-Cycle; Labor-Market Transitions; Turbulence|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search
|Depositing User:||Moritz Kuhn|
|Date Deposited:||27. Jul 2012 13:41|
|Last Modified:||21. Feb 2013 21:45|
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