Author: Markus Riegler
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Category :
Languages : en
Pages :

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Author: Christian Bredemeier
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Category :
Languages : en
Pages : 178

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Author: Gonul Sengul
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Category : Employability
Languages : en
Pages : 192

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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: David Pothier
Publisher:
ISBN:
Category : Labor economics
Languages : en
Pages : 116

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This thesis contributes to the understanding of how socio-economic factors affect the functioning of modern labour markets. It belongs to the strand of academic literature that departs from the standard Walrasian model of the labour market, and considers matching and information frictions to be important determinants of observed labour market phenomena. Within this general framework, this thesis analyses how different forms of agent heterogeneity / socio-demographic identity, productivity, and wealth - affect wage rates and the level of employment in competitive labour markets. The first chapter studies how occupational segregation - the sorting of workers across occupations based on their demographic characteristics - affects the allocation of talent in the labour market. When job vacancy information is transmitted via workers' group-biased social contacts, occupational segregation is found to be a robust equilibrium outcome. The chapter shows that while occupational segregation implies benefits in terms of the job-finding probability of individual workers, it may also engender significant allocative inefficiencies when workers differ in terms of their productivity across occupations. The second chapter examines how heterogeneous workers and firms sort across formal (market-based) and informal (network-based) recruitment channels. When worker and firm productivity are unobservable the two recruitment channels effectively compete in terms of their screening capability. Matching frictions are shown to generate a sorting externality that leads to a multiplicity of equilibrium outcomes, depending on the skill-bias within social networks and the productivity dispersion among workers and firms. The third chapter, co-authored with Damien Puy, examines to what extent variations in wages and employment over the business-cycle can explain the counter-cyclical properties of the income distribution. We show that demand composition effects are an important channel through which aggregate supply shocks are propagated through the economy, and that these have important distributional consequences. In particular, we find income inequality (as measured by the Gini coefficient) to be counter-cyclical. Consistent with empirical evidence, this is shown to be largely due to changes in the level of employment and to a lesser degree to variations in relative factor prices.

Author: Georg Duernecker
Publisher:
ISBN:
Category : Labor economics
Languages : en
Pages : 152

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Author: Christian Manger
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Category :
Languages : en
Pages : 0

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Author: Rigas Oikonomou
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Category :
Languages : en
Pages : 0

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Author: Eunbi Ko
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Category :
Languages : en
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This dissertation develops two models of frictional labor market which provide tools to understand some important phenomena of the US labor market.The first chapter models labor market choices of workers depending primarily on his/her marital status and the partner's labor market outcome if the worker is married. In the household of a married couple, an increase in the husband's wage leads to a rise in the number of days his wife remains out of the labor force. If only one of the couple is employed, a wage increase for the employed partner lengthens the spouse's unemployment duration. Moreover, if both are employed, their wages move in the same direction. To explain these stylized facts, I construct an equilibrium model of the labor market in which a married couple jointly chooses market participation and search for and separation from a job. Calibration shows that the model can correctly account for the facts. The unified framework with endogenous market participation and frictional search is necessary to correctly predict the correlations in spouses' labor market outcomes. Using the benchmark model, I do the policy experiments of unemployment insurance (UI) and the earned income tax credit (EITC). I show that generous UI can increase the employment-population ratio by mitigating married females' disincentive to participate in the market. I also show that the EITC increases the employment of single parents but it decreases the employment of workers who belong to other types of households. In the sense of welfare, the EITC enhances welfare for all single parents, but it reduces welfare of some married parents by reducing the value of working wives.In the second chapter, I construct a directed search model of the labor market with two types of workers and two types of firms to show that an asymmetric positive productivity shock could cause a recent upward shift of the US Beveridge curve. The model possesses an equilibrium in which unskilled workers apply to both high-tech and low-tech firms and skilled workers apply only to high-tech firms. The productivity difference between sectors affects unskilled workers' application strategy: the larger the productivity gap is, the more unskilled workers apply to high-tech firms. The calibration suggests that the productivity difference between sectors has become greater after the recession than before. This makes unskilled workers apply to a high-tech firm with a greater probability than before, which results in the lower average job-finding rate and an upward shift of the Beveridge curve.

Author: Annika Bacher
Publisher:
ISBN:
Category :
Languages : en
Pages : 158

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This thesis is composed of three independent essays in heterogeneous agent macroeconomics. They all explore how family structure affects investment choices and labor market outcomes of individuals. The first chapter, Housing and Savings Behavior Across Family Types, studies how family structure in the form of marital status and changes thereof affect housing demand. I develop a life-cycle model of housing and financial portfolio choice with dynamic and heterogeneous family types that I calibrate to household survey data from the United States. My findings indicate that divorce risk encourages precautionary savings of couples and reduces their demand risky assets and for indivisible housing. Prospective marriage, lower income levels and larger exposure to income fluctuations prevent singles from becoming homeowners. As a result, abstracting from distinct family types overstates the effectiveness of housing policies such as lowering property taxes and reducing housing transaction costs by up to over 100%. This misspecification is largest among young households, who are most likely to be single and whose marital transition risk is highest. In contrast, regulations that facilitate stock market participation help to foster wealth accumulation, because they encourage investment in high return assets that are cheaper to liquidate in the event of a marital or labor income shock. In the second chapter, The Gender Investment Gap over the Life-Cycle, I document with data from the Survey of Consumer Finances that single women hold on average less risky portfolios than single men. To understand the sources of this "Gender Investment Gap", I develop a life-cycle model of portfolio choice that allows for gender differences along observable characteristics and stochastic processes. The model is able to replicate the empirical patterns without introducing gender heterogeneity in preferences. Counterfactual simulations reveal that lower income levels and larger household sizes (mainly through the presence of children) of single women make it optimal for them to invest less risky. Hence, the gender wage gap gets amplified because it results in investment behavior that pays on average lower returns. Importantly, not only current-period income levels and number of household members help to explain this finding but also expectations over their future realizations. The third chapter, Joint Search over the Life-Cycle, co-authored with Philipp Grübener and Lukas Nord, focuses on labor market outcomes and couples. Specifically, we study how intra-household insurance against individual job loss through increased spousal labor market participation, also called the added worker effect, varies over the life cycle. First, we show in U.S. data that the added worker effect is much stronger for young than for old households. A stochastic life cycle model of two-member households with job search in a frictional labor market is capable of replicating this finding. The model suggests that a lower added worker effect for the old is driven primarily by better insurance through asset holdings. Human capital differences between employed young and old contribute to the difference but are quantitatively less important, while differences in job arrival rates play a limited role.

Author: David Zentler-Munro
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Category :
Languages : en
Pages : 0

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The first paper of this thesis considers the impact of minimum wages when search frictions are present and firms can substitute away from low skilled workers to both higher skilled workers and to capital. This represents a contribution to the search literature, which typically assumes labour is the only input of production and perfect substitution between labour inputs. I examine whether the model I develop features significant nonlinearities in the impact of the minimum wage on unemployment. I find that the theoretical contribution of this paper, i.e. allowing for search frictions and imperfect substitutability of factor inputs, is quantitatively significant. Specifically, the nonlinear unemployment response in my model does not occur if I use the typical assumptions of the search literature. In my second paper, I develop a structural model that can help to quantify the relative importance of institutions, labour market frictions and technology in explaining wage inequality. This contribution is a complement to the empirical literature on wage inequality, which tends to emphasise either technological explanations or institutional ones but rarely considers the two jointly. I take my model to the data to test whether estimates of capital skill complementarity in \citet{krusellohanianriosrull} are robust to the inclusion of search frictions. I find this is indeed the case: parameter estimates change very little when allowing for search frictions. My final paper returns to the minimum wage model of my first paper and considers how allowing for asset accumulation by workers changes the model's predictions regarding the relationship between the minimum wage and consumption inequality. I find that allowing for asset accumulation by workers suggests the minimum wage is more successful at reducing consumption inequality than models without asset accumulation would indicate.