Occupational Self-Selection in a Labor Market with Moral Hazard

Berna Demiralp ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents a model of occupational choice in a labor market characterized by moral hazard. The model demonstrates that in such a labor market, workers' occupational choices are determined by not only their comparative advantage but also their effort decisions in each occupation. The estimation results, based on data from the National Longitudinal Survey of Youth, suggest that workers' self-selection into white collar and blue collar occupations leads to higher wages and lower dismissal rates in both occupations. Furthermore, analysis results reveal that these effects of self-selection diminish as the labor market becomes increasingly characterized by moral hazard.

Keywords: occupational choice; moral hazard; self-selection; dismissals (search for similar items in EconPapers)
JEL-codes: J24 J63 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-lab
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Related works:
Journal Article: Occupational self-selection in a labor market with moral hazard (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2314

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