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Title: Job Search and Asset Accumulation Under Borrowing Constraints
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Rendon, Silvio Roberto |
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Job Search and Asset Accumulation Under Borrowing Constraints Ph.D. Dissertation, New York University, 1997 Cohort(s): NLSY79 Publisher: UMI - University Microfilms, Bell and Howell Information and Learning Keyword(s): Assets; Job Search; Labor Economics; Labor Market Demographics; Labor Market Surveys; Transfers, Financial; Wage Effects In this thesis, I show how borrowing constraints and job search interact. Assets influence job search outcomes by allowing wealthier people to be more selective and obtain higher wages, so that initial wealth positively affects success in the labor market. On the other hand, employment transitions influence asset accumulation: unemployed individuals maintain their consumption by running down their assets, and employed agents save to buffer against future unemployment spells and future lower wages. I fit the model to data from the National Longitudinal Survey (1979-cohort) and I quantify the two main effects mentioned above. A permanent decrease of $100 in unemployment net transfers leads to a decrease in assets holdings of $17 for blacks and $183 for whites twenty quarters after high school graduation. I also show that most of the wage differences across people are accounted for by differences in their labor market environments, rather than by differences in their initial wealth. Twenty quarters after leaving high school, an individual who started off with $2,000 of initial assets can have quarterly wages $50 higher than an individual who started off with no assets. In particular, if blacks had the labor market environment of whites, their quarterly wages twenty quarters after graduation would be $3,974 and not $3,384. This would be still below the $4,048 quarterly wages of whites. |
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Bibliography Citation
Rendon, Silvio Roberto. Job Search and Asset Accumulation Under Borrowing Constraints. Ph.D. Dissertation, New York University, 1997. |