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Asset Accumulation and Short Term Employment

Martin Browning, Thomas Crossley and Eric Smith ()

No 2003-02, CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics

Abstract: This paper investigates the search and consumption behavior of workers as they move between readily available low wage employment and uncertain search for a high wage job. Analytic results derived from our model include: (1) voluntary planned quits occur in a cyclical pattern, (2) consumption while searching falls over time until either a good job is found or assets run out and the worker accepts a low wage job, (3) consumption during low wage employment is less than earnings, and (4) the durations of job search and employment as well as the pattern of consumption are related to turnover costs and wages. Empirical evidence from the 1995 Canadian out of Employment Panel (COEP) broadly supports these relationships. In these data, there exists a high incidence of displaced workers taking temporary low wage jobs. Examining the income, consumption and savings patterns of workers in different regimes, we fiind that these accord with the theoretical predictions.

Keywords: unemployment; search; consumption; assets (search for similar items in EconPapers)
JEL-codes: D83 D91 J64 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2003-02
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http://www.econ.ku.dk/cam/wp0910/wp0203/2003-02.pdf/ (application/pdf)

Related works:
Journal Article: Asset Accumulation and Short Term Employment (2007) Downloads
Working Paper: Asset Accumulation and Short Term Employment (2002) Downloads
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