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http://hdl.handle.net/10419/67324
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| Title: | | Earnings losses and labor mobility over the lifecycle  |
| Authors: | | Jung, Philip Kuhn, Nikolas Moritz |
| Issue Date: | | 2012 |
| Series/Report no.: | | Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 6835 |
| Abstract: | | 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. |
| Subjects: | | earnings losses lifecycle labor-market transitions turbulence |
| JEL: | | E24 J63 J64 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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