Job separations, heterogeneity, and earnings inequality

Pedro Amaral

No 910, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: Changes in the fraction of workers experiencing job separations can account for> most of the increase in earnings dispersion that occurred both between, as well as> within educational groups in the United States from the mid-1970s to the mid-> 1980s. This is not true of changes in average earnings losses following job separations.> A search model with exogenous human capital accumulation calibrated> to match some selected moments of the U.S. labor market is used to measure the> effects of changes in the fraction of workers experiencing job separations (extensive> margin) versus changes in average earnings losses following job separations> (intensive margin). While both margins do well in accounting for the increase in> the college premium, only the changes in the extensive margin do well in accounting> for the increases in the variance of both the permanent and transitory> components of earnings.

Keywords: Wages; Income distribution (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-dge and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:0910

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DOI: 10.26509/frbc-wp-200910

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