Earnings losses and labor mobility over the life-cycle

Philip Jung () and Moritz Kuhn

MPRA Paper from University Library of Munich, Germany

Abstract: An extensive empirical literature has documented that workers with high tenure suffer large and persistent earnings losses when they get displaced. We study the reasons behind these losses in a tractable search model with a life-cycle dimension, endogenous job mobility, worker- and match-heterogeneity. The model reconciles key characteristics of the U.S. labor market: large average transition rates, a large share of stable jobs, and the earnings losses from displacement. We decompose the earnings losses and find that only 50% result from skill losses. Endogenous reactions and selection account for the remainder. Our findings have important implications for the welfare costs of displacement and labor market policy.

Keywords: Earnings Losses; Life-Cycle; Labor-Market Transitions; Turbulence (search for similar items in EconPapers)
JEL-codes: E24 J63 J64 (search for similar items in EconPapers)
Date: 2012-07-27
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/40287/1/MPRA_paper_40287.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/41010/2/MPRA_paper_41010.pdf revised version (application/pdf)

Related works:
Journal Article: Earnings Losses and Labor Mobility Over the Life Cycle (2019)
Working Paper: Earnings Losses and Labor Mobility Over the Life Cycle (2017)
Working Paper: Earnings losses and labor mobility over the lifecycle (2016)
Working Paper: Earnings losses and labor mobility over the lifecycle (2013)
Working Paper: Earnings Losses and Labor Mobility over the Lifecycle (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40287

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().