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Title: Wage Dynamics and Labor Market Transitions: A Reassessment through Total Income and "Usual" Wages
Resulting in 1 citation.
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Canon, Maria E. Pavan, Ronni |
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Wage Dynamics and Labor Market Transitions: A Reassessment through Total Income and "Usual" Wages Working Paper 2014-032A, Federal Reserve Bank of St. Louis, October 2014. Also: https://research.stlouisfed.org/wp/2014/2014-032.pdf Cohort(s): NLSY79 Publisher: Federal Reserve Bank of St. Louis Keyword(s): Earnings; Income Dynamics/Shocks; Transition, Job to Job; Wage Dynamics Permission to reprint the abstract has not been received from the publisher. We present a simple on-the-job search model in which workers can receive shocks to their employer-specific productivity match. Because the firm-specific match can vary, wages may increase or decrease over time at each employer. Therefore, for some workers, job-to-job transitions are a way to escape job situations that worsened over time. We use two independent measures of workers compensation to provide a convincing identification strategy for the presence of a job-specific or employer-specific wage shock process. In the first measure, workers are asked about the usual wage they earn with a certain employer. In the second measure, workers are asked about their total amount of labor earnings during the previous year. While the first measure records the wages at a given point in time, the second measure records the sum of all wages within one year. We calibrate our model using both measures of workers compensation and data on employment transitions. The results show that 59% of the observed wage cuts following job-to-job transitions are due to deterioration of the firm-specific component of wages before workers switch employers. |
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Bibliography Citation
Canon, Maria E. and Ronni Pavan. "Wage Dynamics and Labor Market Transitions: A Reassessment through Total Income and "Usual" Wages." Working Paper 2014-032A, Federal Reserve Bank of St. Louis, October 2014. |