A Quantitative Theory of Information, Worker Flows, and Wage Dispersion

Amanda Michaud

American Economic Journal: Macroeconomics, 2018, vol. 10, issue 2, 154-83

Abstract: Employer learning provides a link between wage and employment dynamics. Workers who are selectively terminated when their low productivity is revealed subsequently earn lower wages. If learning is asymmetric across employers, randomly separated high-productivity workers are treated similarly when hired from unemployment, but recover as their next employer learns their type. I provide empirical evidence supporting this link, then study whether employer learning is an empirically important factor in wage and employment dynamics. In a calibrated structural model, learning accounts for 78 percent of wage losses after unemployment, 24 percent of life-cycle wage growth, and 13 percent of cross-sectional dispersion observed in data.

JEL-codes: D83 E24 J23 J24 J31 J62 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mac.20160136
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mac.20160136 (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... 1p9x_XgAfNwCk2gC6Je- (application/zip)
https://www.aeaweb.org/articles/attachments?retrie ... bF88giF06AzeMjEeIYZD (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... x5hsXGpzMvIF0IcnjWNt (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
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:aea:aejmac:v:10:y:2018:i:2:p:154-83

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Macroeconomics is currently edited by Simon Gilchrist

More articles in American Economic Journal: Macroeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().