Jung, Philip and Kuhn, Moritz (2012): Earnings losses and labor mobility over the life-cycle.
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Extensive literature demonstrates that workers with high tenure suffer large and persistent earnings losses when they are displaced. We study the reasons behind these losses in a tractable search model that includes a lifecycle dimension, endogenous job mobility, and worker- and match-heterogeneity. The model jointly explains key characteristics of the U.S. labor market such as large average transition rates, a large share of stable jobs, and earnings losses after displacement. We decompose earnings losses and find that only 50% result from wage loss, and endogenous reactions and selection account for the remainder. These findings have important implications for welfare costs of displacement and labor market policies.
|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; Lifecycle; 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:||03. Sep 2012 15:08|
|Last Modified:||16. Feb 2013 02:15|
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Earnings losses and labor mobility over the life-cycle. (deposited 27. Jul 2012 13:41)
- Earnings losses and labor mobility over the life-cycle. (deposited 03. Sep 2012 15:08) [Currently Displayed]