Earnings losses and labor mobility over the life-cycle
Philip Jung () and
MPRA Paper from University Library of Munich, Germany
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)
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac and nep-mig
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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)
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)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40287
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