Workers' Perceptions of Earnings Growth and Employment Risk

Arbeitspapier

In addition to realized earnings and employment shocks, forward-looking individuals are presumed to condition their consumption and labor supply decisions on their subjective beliefs about future labor market risks. This paper analyzes these perceptions of earnings and employment risks using rich monthly panel data. It documents considerable individual heterogeneity in expected earnings growth and earnings growth uncertainty and in the perceived likelihood of a voluntary and involuntary job exit. We examine how these expectations evolve over the working life and the business cycle, and how they co-vary with expectations about the macro economy. Our analysis provides novel evidence on the perceived persistence in earnings growth shocks and on the association between future earnings and spending growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16013

Classification and Topics

• Classification: Wirtschaft ; Expectations; Speculations ; Criteria for Decision-Making under Risk and Uncertainty ; Wage Level and Structure; Wage Differentials ; Labor Turnover; Vacancies; Layoffs ; Consumer Economics: Empirical Analysis ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Subject: expectations data ; beliefs ; household surveys ; strategic survey questions ; labor market uncertainty ; wage persistence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koşar, Gizem ; van der Klaauw, Wilbert
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/272640
• Last update: 10.03.2025, 11:42 AM CET