Earnings instability of job stayers and job changers

Arbeitspapier

I use the PSID to decompose the rise in wage inequality into a permanent and a transitory component. I consider separately job stayers and job changers. I find that earnings instability (the variance of the transitory component of earnings) increased much more among job changers than among job stayers. I interpret the evidence in a search and matching model with on-the-job search. The increasing variance of the transitory component of earnings is modeled as a mean-preserving spread of the distribution of productivity shocks. The meanpreserving spread induces on-the-job search on a wider range of productivity values. As a result of increased on-the-job search, the variance of the transitory part of earnings increases among job changers. The direction of the change in the transitory variance across job stayers is ambiguous and depends on their composition between non-seekers and on-the-job seekers who did not find a new job.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 946

Classification and Topics

• Classification: Wirtschaft ; Wage Level and Structure; Wage Differentials ; Labor Force and Employment, Size, and Structure
• Subject: earnings instability ; on-the-job search ; Einkommen ; Volatilität ; Arbeitsmobilität ; Arbeitsplatzsuchmodell ; Schätzung ; Theorie ; Vereinigte Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Leonardi, Marco
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/20182
• Last update: 10.03.2025, 11:43 AM CET