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Author: Lucas Navarro Publisher: ISBN: Category : Languages : en Pages : 17
Book Description
This paper analyzes the effects of unemployment benefits and minimum wage policies in a noncompetitive labor market with two sectors, two types of workers and sector specific search. It finds that those policies can shift the job composition towards low-wage jobs and that they will never increase the number of high-wage jobs. Welfare can only increase because of reduced social vacancy creation costs. The paper is an extension of Acemoglu (2001) who finds in the homogeneous worker random search version of the model that the mentioned labor market policies can shift the job composition toward high-wage jobs, increase the number of high-wage jobs and welfare.
Author: Lucas Navarro Publisher: ISBN: Category : Languages : en Pages : 17
Book Description
This paper analyzes the effects of unemployment benefits and minimum wage policies in a noncompetitive labor market with two sectors, two types of workers and sector specific search. It finds that those policies can shift the job composition towards low-wage jobs and that they will never increase the number of high-wage jobs. Welfare can only increase because of reduced social vacancy creation costs. The paper is an extension of Acemoglu (2001) who finds in the homogeneous worker random search version of the model that the mentioned labor market policies can shift the job composition toward high-wage jobs, increase the number of high-wage jobs and welfare.
Author: Ana Luisa Toledo Piza Pessoa Araujo Publisher: ISBN: Category : Languages : en Pages : 95
Book Description
This dissertation studies the interaction between job stability and labor markets. Chapter 1 studies the impact of firm turnover and job recall on wages. I start this chapter with an empirical contribution. I demonstrate the importance of recall and turnover for employment dynamics and wages using matched employer-employee data from Brazil. First, I document large dispersion of job-destruction rates and recall rates across sectors. Second, I show that after controlling for worker and firm characteristics, sectors with greater job instability (an inverse measure of tenure that controls for recall) pay more. To explain this finding I construct a multi-sector closed economy version of Mortensen and Pissarides (1994) with directed search and heterogeneous recall rates as well as heterogeneous layoff rates across sectors. Once I have estimated the model's parameters using the data, I then conduct the main experiment which is to assess the impact of Brazil's recall restrictions on employment dynamics. The Brazilian government bans recalls within 3 months of the date of firing. I simulate the imposition of this law, and I find that this restriction on recall activity decreases the employment rate significantly in aggregate, but the impact is very heterogeneous across sectors. Chapter 2, studies wage inequality and job stability. I start this chapter with a data motivation where I use matched employer-employee data to establish that separations are disproportionately comprised of layoffs for low wage workers, not separations due to job-to-job transitions. Secondly, I show that existing models such as Burdett and Coles (2003) and Shi (2009) are inconsistent with this fact since they assume that the exogenous component of job destruction is constant across firms, and low wage workers search on-the-job much more intensely than high wage workers. To explain this fact, I develop a new model that takes into account the disproportionate share of layoffs among low wage workers. I show that after correctly matching the wage/layoff relationship, the introduction of a 30% `firing cost' results in nearly twice as much wage inequality as compared to a model with a homogeneous firing rate across firms.
Author: Mr.Olivier Coibion Publisher: International Monetary Fund ISBN: 1475505493 Category : Business & Economics Languages : en Pages : 57
Book Description
We study the effects and historical contribution of monetary policy shocks to consumption and income inequality in the United States since 1980. Contractionary monetary policy actions systematically increase inequality in labor earnings, total income, consumption and total expenditures. Furthermore, monetary shocks can account for a significant component of the historical cyclical variation in income and consumption inequality. Using detailed micro-level data on income and consumption, we document the different channels via which monetary policy shocks affect inequality, as well as how these channels depend on the nature of the change in monetary policy.
Author: Sónia Félix Publisher: ISBN: Category : Languages : en Pages : 34
Book Description
We use matched employer-employee data and firm balance sheet data to investigate the importance of firm productivity and firm labor market power in explaining firm heterogeneity in wage formation. We use a linear regression model with one interacted high dimensional fixed effect to estimate 5-digit sector-specific elasticity of output with respect to input factors directly from the production function. This allows to derive firm specific price-cost mark-up and elasticity of labor supply. The results show that firms possess a considerable degree of product and labor market power. Furthermore, we find evidence that firm's monopsony power affects negatively the earnings of its workers and firm's total factor productivity is considerably associated with higher earnings, ceteris paribus. We also find that firms use monopsony power for wage differentiation between male and female workers.
Author: Kevin Lang Publisher: ISBN: Category : Employment (Economic theory) Languages : en Pages : 54
Book Description
Since applying for jobs is costly, workers prefer applying where their employment probability is high and, therefore, to jobs attracting fewer higher quality applicants. Since creating vacancies is expensive, firms create more vacancies when job-seeking is high. Our model captures these ideas and accounts for worker heterogeneity by assuming three types of nearly identical workers. These infinitesimal quality differences generate a discrete wage distribution. For some parameter values lower quality workers have discretely lower wages and higher unemployment than better workers. Moreover, increasing the number of the lowest quality workers can make all workers better off.
Author: Pierre-Richard Agénor Publisher: International Monetary Fund ISBN: 1451854781 Category : Business & Economics Languages : en Pages : 98
Book Description
This paper examines the role of the labor market in the transmission process of adjustment policies in developing countries. It begins by reviewing the recent evidence regarding the functioning of these markets. It then studies the implications of wage inertia, nominal contracts, labor market segmentation, and impediments to labor mobility for stabilization policies. The effect of labor market reforms on economic flexibility and the channels through which labor market imperfections alter the effects of structural adjustment measures are discussed next. The last part of the paper identifies a variety of issues that may require further investigation, such as the link between changes in relative wages and the distributional effects of adjustment policies.
Author: Robert Shimer Publisher: Princeton University Press ISBN: 1400835232 Category : Business & Economics Languages : en Pages : 189
Book Description
Labor Markets and Business Cycles integrates search and matching theory with the neoclassical growth model to better understand labor market outcomes. Robert Shimer shows analytically and quantitatively that rigid wages are important for explaining the volatile behavior of the unemployment rate in business cycles. The book focuses on the labor wedge that arises when the marginal rate of substitution between consumption and leisure does not equal the marginal product of labor. According to competitive models of the labor market, the labor wedge should be constant and equal to the labor income tax rate. But in U.S. data, the wedge is strongly countercyclical, making it seem as if recessions are periods when workers are dissuaded from working and firms are dissuaded from hiring because of an increase in the labor income tax rate. When job searches are time consuming and wages are flexible, search frictions--the cost of a job search--act like labor adjustment costs, further exacerbating inconsistencies between the competitive model and data. The book shows that wage rigidities can reconcile the search model with the data, providing a quantitatively more accurate depiction of labor markets, consumption, and investment dynamics. Developing detailed search and matching models, Labor Markets and Business Cycles will be the main reference for those interested in the intersection of labor market dynamics and business cycle research.
Author: Tzuo Hann Law Publisher: ISBN: Category : Languages : en Pages : 326
Book Description
The importance of time invariant, but unobserved characteristics of workers and their employers in the determination of wages is well known. This suggests that models of (un)employment featuring permanent worker and firm types are crucial for our understanding of labor markets. While such models are numerous, it was thought that even very simple ones were fundamentally not identifiable with wage data alone. Hence, the empirical content of these models were largely a mystery. With that, our understanding of permanent unobserved heterogeneity has been restricted to statistical models with limited economic interpretation. In the first chapter of my dissertation (joint with Marcus Hagedorn and Iourii Manovskii), I overcome this fundamental problem. I assess the empirical content of equilibrium models of labor market sorting based on unobserved (to economists) characteristics. Specifically, I develop quantitative tools to identify and estimate a wide class of models of labor market sorting. I not only find that many models are likely completely identifiable but that reliable estimates of key model primitives can be obtained using routinely available matched employer-employee datasets. In the second chapter of my dissertation (with Kory Kantenga), I apply the framework developed in the first chapter to study the role of worker and employer heterogeneity in driving German wage inequality between 1993 and 2007. The model I earlier developed fits overall wage variance, the wage function, search frictions, unemployment levels and the degree of sorting between workers and firms. The fit of the model is comparable to non-structural approaches which utilize many more degrees of freedom. In decomposing the rise in German wage inequality, I find that changes in the non-parametrically estimated production function and the sorting between worker and firm types that it induces accounts for most of the increase in German wage inequality. Finally, by testing whether log wage differences between employees who are coworkers at two distinct firms are constant, I show that the commonly assumed log additive separability approximation of log wages is rejected. Finally, the estimated model is capable of reproducing the degree of non additive separability in the data.
Author: Lucas Navarro
Author: Lucas Navarro
Author: 
Author: Ana Luisa Toledo Piza Pessoa Araujo
Author: Mr.Olivier Coibion
Author: Sónia Félix
Author: Kevin Lang
Author: Pierre-Richard Agénor
Author: Robert Shimer
Author: Tzuo Hann Law
Author: Carl Davidson