EconPapers    
Economics at your fingertips  
 

Comparative Advantage and Risk Premia in Labor Markets

German Cubas () and Pedro Silos ()

No 213, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: Using the Survey of Income and Program Participation (SIPP) we estimate quarterly labor earnings risk across 21 industries of the US economy. We document a significant and positive association between earnings risk (both permanent and transitory) and average log-earnings across industries. The Finance sector is 50% riskier than Government which implies a mean earnings premium of 20. We develop an equilibrium framework to analyze the interplay between volatility in labor earnings and comparative advantage in determining the level of earnings across industries. We use the model to decompose how much of the empirical correlation represents compensation for risk and how much represents selection. The positive association between permanent risk and earnings is compensation for risk, but selection is responsible for the observed relationship between temporary risk and mean earnings.

Keywords: Risk Premium; Labor Markets; Industry; Comparative Advantage (search for similar items in EconPapers)
JEL-codes: D91 J31 J61 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2013-03
New Economics Papers: this item is included in nep-ger
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://cienciassociales.edu.uy/departamentodeecono ... 13/archivos/0213.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://cienciassociales.edu.uy/departamentodeeconomia/wp-content/uploads/sites/2/2013/archivos/0213.pdf [301 Moved Permanently]--> https://cienciassociales.edu.uy/departamentodeeconomia/wp-content/uploads/sites/2/2013/archivos/0213.pdf)

Related works:
Working Paper: Comparative Advantage and Risk Premia in Labor Markets (2013) Downloads
Working Paper: Comparative Advantage and Risk Premia in Labor Markets (2012) Downloads
Working Paper: Comparative advantage and risk premia in labor markets (2012) Downloads
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:ude:wpaper:0213

Access Statistics for this paper

More papers in Documentos de Trabajo (working papers) from Department of Economics - dECON Contact information at EDIRC.
Bibliographic data for series maintained by Andrea Doneschi () and Romina Quagliotti ().

 
Page updated 2021-05-05
Handle: RePEc:ude:wpaper:0213