[PDF] Heterogeneity Selection And Labor Market Disparities eBook

Author :
Publisher :
Page : 119 pages
File Size : 42,91 MB
Release : 2014
Category : Labor economics
ISBN :

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In my thesis, I study the effects of agents' heterogeneity on labor market outcomes, with particular focus on sorting, performance, wages, and inequality. Chapter one studies multidimensional matching between workers and jobs. Workers differ in manual and cognitive skills and sort into jobs that demand different combinations of these two skills. To study this multidimensional sorting, I develop a theoretical framework that generalizes the unidimensional notion of assortative matching. I derive the equilibrium in closed form and use this explicit solution to study biased technological change. The key finding is that an increase in worker-job complementarities in cognitive relative to manual inputs leads to more pronounced sorting and wage inequality across cognitive relative to manual skills. This can trigger wage polarization and boost aggregate wage dispersion. I then estimate the model for the US during the 1990s. I identify a significant increase in complementarities of cognitive inputs and in cognitive skill-bias in production. Counterfactual exercises suggest that these technology shifts can account for observed changes in worker-job sorting, wage polarization and a significant part of the increase in US wage dispersion. Chapter two develops a theory that links differences in men's and women's social networks to disparities in their labor market performance. We are motivated by our empirical finding that men's and women's networks differ. Men have a higher degree (more network links) than women, but women have a higher clustering coefficient (a woman's friends are also friends among each other). In our model, a worker with a higher degree has better access to information. In turn, a worker with a higher clustering coefficient faces more peer pressure. Both peer pressure and access to information can attenuate a team moral hazard problem in the work place. But whether peer pressure or access to information is more important depends on the work environment. We find that, in environments where uncertainty is high, information is crucial and, therefore, men outperform women / in line with findings from sectors with high earnings' uncertainty like the financial or film industry.

Author : Michael Sattinger
Publisher : Springer Science & Business Media
Page : 187 pages
File Size : 13,53 MB
Release : 2012-12-06
Category : Business & Economics
ISBN : 3642705472

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This monograph began as a study of the consequences of labor force effects, in cluding unemployment, for the distribution of earnings. I began by developing a model of job search. But following my previous work on the distribution of earnings, the search theory took a different form from the standard literature. Workers and firms were engaged in mutual search which effectively assigned workers to jobs. A number of open questions immediately became apparent, including the relation bet ween unemployment and inequality, the nature and costs of unemployment, and the role of choice. These quickly provided sufficient material for the monograph. I began work on the project in 1980 at Miami University of Ohio. I wish to thank my chairman there, William McKinstry, for the support I received during my last year there. My colleagues Donald Cymrot and James Moser provided some early com ments on the project and I am indebted to Joseph Simpson for extensive computer assistance.

Author : Federico Ravenna
Publisher :
Page : 53 pages
File Size : 38,37 MB
Release : 2020
Category : COVID-19 (Disease)
ISBN :

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In a new Keynesian model with random search in the labor market, endogenous selection among heterogeneous workers amplifies fluctuations in unemployment and results in excess unemployment volatility relative to the efficient allocation. Recessions disproportionately affect low-productivity workers, whose unemployment spells are inefficiently frequent and long. We consider a COVID-recession resulting from a negative demand shock and a surge in exogenous separations. High-productivity workers benefit if separations in a pandemic take the form of temporary layoffs, but this is not true for low-productivity workers. The unemployment consequences are especially severe when nominal interest rates are close to the effective lower bound.

Author : Gonul Sengul
Publisher :
Page : 192 pages
File Size : 20,39 MB
Release : 2009
Category : Employability
ISBN :

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My dissertation focuses on the heterogeneity in labor markets. The first chapter proposes an explanation for the unemployment rate difference between skill groups. Low skill workers (workers without a four year college degree) have a higher unemployment rate. The reason for that " ... is mainly because they (low skill workers) are more likely to become unemployed, not because they remain unemployed longer, once unemployed" (Layard, Nickell, Jackman, 1991, p. 44). This chapter proposes an explanation for the difference in job separation probabilities between these skill groups: high skill workers have lower job separation probabilities as they are selected more effectively during the hiring process. I use a labor search model with match specific quality to quantify the explanatory power of this hypothesis on differences in job separation probabilities and unemployment rates across skill groups. The second chapter analyzes the effects of one channel of interaction (job competition) between skill groups on their labor market outcomes. Do skilled workers prefer unskilled jobs to being unemployed? If so, skilled workers compete with unskilled workers for those jobs. Job competition generates interaction between the labor market outcomes of these groups. I use a heterogeneous agents model with skilled and unskilled workers in which the only interaction across groups is the job competition. Direct effects of job competition are reducing skilled unemployment rate (since they have a bigger market) and increasing the unskilled unemployment rate (since they face greater competition). However number of vacancies respond to job competition in equilibrium. For instance, unskilled firms have incentives to open more vacancies since filling a vacancy is easier if there is job competition. Thus how unskilled unemployment and wages are affected by job competition depends on which effect dominates. The results for reasonable parameter values show that job competition does reduce the average unemployment rate. It reduces the skilled unemployment rate more, generating an increase in unemployment rate inequality. However, the employment rate at skilled jobs is unaffected. The third chapter focuses on skill biased technological change. Skill biased technological change is one of the explanations for the asymmetry between labor market outcomes of skill groups over the last few decades. However, during this time period there were also skill neutral shocks that could contribute to these outcomes. The third chapter analyzes the effects of skill biased and neutral shocks on overall labor market variables. I use a model in which skilled and unskilled outputs are intermediate goods, and final good sector receives all the shocks. A numerical exercise shows that both skilled and unskilled unemployment rates respond to shocks in the same direction. The response of unemployment rate to skill neutral shocks is bigger than the response to skill biased shocks for both skill groups. However, the unskilled unemployment changes more than the skilled unemployment rate as a response to skill neutral shocks. Thus, skill neutral shocks reduce the unemployment rate gap between skill groups.

Author : Flavio Cunha
Publisher :
Page : 68 pages
File Size : 11,62 MB
Release : 2007
Category : Unskilled labor
ISBN :

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A large empirical literature documents a rise in wage inequality in the American economy. It is silent on whether the increase in inequality is due to greater heterogeneity in the components of earnings that are predictable by agents or whether it is due to greater uncertainty faced by agents. Applying the methodology of Cunha, Heckman and Navarro (2005) to data on agents making schooling decisions in different economic environments, we join choice data with earnings data to estimate the fraction of future earnings that is forecastable and how this fraction has changed over time. We find that both predictable and unpredictable components of earnings have increased in recent years. The increase in uncertainty is substantially greater for unskilled workers. For less skilled workers, roughly 60% of the increase in wage variability is due to uncertainty. For more skilled workers, only 8% of the increase in wage variability is due to uncertainty. Roughly 26% of the increase in the variance of returns to schooling is due to increased uncertainty. Using conventional measures of income inequality masks the contribution of rising uncertainty to the rise in the inequality of earnings for less educated groups.

Author : Xiaoxue Song
Publisher :
Page : 0 pages
File Size : 15,51 MB
Release : 2022
Category : Human capital
ISBN :

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My dissertation consists of three chapters studying the heterogeneity in the labor market. Chapter 1 studies the by-age employment heterogeneity in response to technology shocks. Chapter 2 studies the by-age labor force participation heterogeneity in response to macroeconomic shocks. Chapter 3 studies the effect of monetary policy on the employment of occupations with different levels of routine task intensity. A central question in macroeconomics is how employment changes in response to technological progress. In Chapter 1, I broaden this question by investigating if there exist age-specific effects. I use the mixed autoregression (MAR) model to explicitly model the employment to population ratio as a function of age. The results show the responses of young and old employment ratios are much more negative than prime-age, and the response of the young is three times lower than that of the old. Moreover, the forecast error variance decomposition results show that technology shocks' contribution decreases by age. The labor force participation rate is weakly procyclical, as opposed to employment, which is strongly procyclical. Therefore, labor force participation is mostly assumed to be constant in the literature. However, the young, prime-age, and old participation rates are heterogeneous in cyclicality and volatility. In Chapter 2, I study the heterogeneity in the participation of 16-65 old in response to important macroeconomic shocks. I extend the identification scheme in the MAR model from zero to sign restrictions, which enable me to include labor market shocks important for explaining participation rate fluctuations. The results show that young, prime-age, and old participation rates respond differently to the technology, demand, labor supply, and wage bargaining shocks.Routine occupation employment share has decreased, while non-routine occupation employment share has increased since the 1980s. This trend of job polarization has been contributing to the growth in wage inequality in the US. In Chapter 3, I study the effect of a contractionary monetary policy shock on occupational employment with different levels of routine task inputs in a MAR model. I show that routine occupation groups' employment, especially those with higher offshorability, are disproportionally affected by a contractionary monetary policy shock.

Author : Miguel Alonso Sarzosa
Publisher :
Page : 77 pages
File Size : 45,26 MB
Release : 2018
Category : Discrimination in employment
ISBN :

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Sexual minorities have historically been subject to many kinds of discrimination. Prejudicial treatment in the labor market could arguably be one of them. Despite that, economic literature has remained mostly silent on the topic. This paper fills that void by leveraging on a novel longitudinal data set that collects detailed information on sexual orientation. I develop an empirical strategy that exploits the fact that sexuality is not a dichotomous trait but rather a wide assortment of sexual preferences. I use empirical models that rely on the identification of unobserved heterogeneity, in the forms of skills and sexual orientation, to allow schooling, employment, and income to be endogenously determined. I find that, after controlling for differences in skills distributions, there are no income gaps against employed homosexuals. However, consistent with the existence of discrimination, homosexuals are 10–20 percentage points less likely to be employed than heterosexuals. These gaps cannot be explained by differences in observable characteristics or skills and are larger among men and the college educated. The results suggest that selection on the employment margin contributes to the elimination of the income gaps as only the highly skilled homosexuals—and thus, higher paid— are employed.

Author : Josefina Posadas
Publisher :
Page : 252 pages
File Size : 28,50 MB
Release : 2010
Category :
ISBN :

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Abstract: One of the most salient transformations of Twentieth Century labor markets is the increasing participation of women. This transformation is the result of social and economic changes that had a deep impact on many choices women make, such as the number of children they have and the type of career they pursue. This dissertation contributes to the existing literature by further analyzing the role of selection in the labor force, labor market transitions and child care costs on women's labor market outcomes in the US and in Europe. In the first chapter, I compare men and women of two recent cohorts. The use of panel data allows the consistent estimation of the returns to labor market skills over the life-cycle and to uncover the role of individual heterogeneity and contemporaneous idiosyncratic shocks on women's selection into the labor force. In addition, by comparing two cohorts of women with very different expectations and behavior, this chapter contributes to the literature that investigates the determinants of the decline in gender differentials during the past fifty years. The second chapter (with Marian Vidal-Fernández) examines the role of grandparents' child care provision on mothers' labor market participation. Using data for eleven European countries, we find significant differences in the characteristics of families who rely on this form of child care arrangement. Instrumental variable estimates show that the availability of grandparents' care is associated with a fifteen percent increase in female labor force participation. Moreover, we find that estimates that do not control for simultaneity might be downward biased suggesting that women who benefit the most from this type of care have lower potential wages. The third chapter analyzes gender differences in job transitions using a competing risks model. I distinguish between three mutually exclusive states: (i) moving to another job, (ii) moving to unemployment, and (iii) moving out-of-the labor force. Having three states is crucial to accurately measure gender differences in turnover behavior. Failing to consider these multiple states leads to the underestimation of gender differences in turnover since men are more prone to move to unemployment while women move out-of-the labor force.