Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273037 
Authors: 
Year of Publication: 
2022
Series/Report no.: 
Working Papers No. 22-16
Publisher: 
Federal Reserve Bank of Boston, Boston, MA
Abstract: 
This article offers the first empirical evidence that labor force exit rates rise when workers' relative earnings fall. The model takes into account that a job not only provides economic security but also affirms a worker's social status, which is tied to their relative position in the labor market. Based on the results, the decline in relative earnings for non-college prime-age men over the last four decades is estimated to have raised their labor force exit propensity by 0.49 percentage point, accounting for 44 percent of the total growth in their labor force exit rate during this period.
Subjects: 
labor force exit rates
prime-age male labor force participation
relative earnings
wage inequality
JEL: 
J21
J24
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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