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Author: Demiralp, Berna
Resulting in 3 citations.
1. Demiralp, Berna
Implications of Occupational Self-Selection in a Labor Market with Moral Hazard and Asymmetric Information
Ph.D. Dissertation, The Johns Hopkins University, May 2006. DAI-A 66/11, May 2006.
Also: http://proquest.umi.com/pqdweb?did=1034632901&sid=1&Fmt=2&clientId=3959&RQT=309&VName=PQD
Cohort(s): NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Human Capital; Modeling, Hazard/Event History/Survival/Duration; Occupational Choice; Wage Growth; Wage Rates

Permission to reprint the abstract has not been received from the publisher.

In this dissertation, I analyze the consequences of occupational self-selection in a labor market with moral hazard and asymmetric information. I provide a structural estimation of a shirking model with occupational self-selection and investigate how well it explains the differences in wages and dismissal rates observed in white collar and blue collar occupations. This dissertation consists of two papers. In the first paper, I present a structural model of occupational self-selection in a labor market characterized by asymmetric information and moral hazard. The model demonstrates that in such a labor market, when making occupational choices, workers take into account their probability of shirking and the monitoring intensity in each occupation. The estimation results, based on data from the National Longitudinal Survey of Youth, find evidence of occupational self-selection in the labor market such that the distribution of worker abilities in an occupation differs in a systematic way from the distribution in the population as a whole. Furthermore, self-selection of workers significantly contributes to the differences in dismissal rates and wages across occupations. In particular, the results of this paper show that workers' self-selection leads to higher wages and lower dismissal rates in the white collar occupation and lower wages and higher dismissal rates in the blue collar occupation compared to an economy in which workers are randomly assigned to occupations.

In the second paper, I consider three extensions to the original self-selection model presented in Chapter 3. Workers are assumed to accumulate human capital and experience dismissals that are exogenous to their behavior. Results suggest that adding human capital accumulation to the original model enhances the model's fit to the white collar wage data but worsens its fit to observed dismissal rates in both occupations. The model that includes both human capital accumulation and exogenous dismissals explain the observed wage and dismissal dynamics the best. Human capital accumulation is responsible for most of the wage growth observed in the white collar occupation whereas the direct effect of human capital on the blue collar wage growth is not substantial.

Bibliography Citation
Demiralp, Berna. Implications of Occupational Self-Selection in a Labor Market with Moral Hazard and Asymmetric Information. Ph.D. Dissertation, The Johns Hopkins University, May 2006. DAI-A 66/11, May 2006..
2. Demiralp, Berna
Occupational Self-selection in a Labor Market with Moral Hazard
European Economic Review 55,4 (May 2011): 497-519.
Also: http://www.sciencedirect.com/science/article/pii/S0014292110000735
Cohort(s): NLSY79
Publisher: Elsevier
Keyword(s): Human Capital; Modeling, Hazard/Event History/Survival/Duration; Occupational Choice; Wage Growth; Wage Rates

This paper studies the determinants and implications of self-selection when firms imperfectly observe worker effort. The effects of the resulting moral hazard problem on the self-selection mechanism are analyzed in a model in which workers simultaneously choose an employment sector and an effort level. The implications of the model reveal that in the presence of moral hazard, workers' effort decisions become an additional mechanism determining the pattern of selection into sectors. Workers' sector-specific endowments impact sectoral allocation through their effect on workers' comparative advantage as well as their effect on workers' shirking propensity. The model is then used in an empirical application that analyzes workers' self-selection into white collar and blue collar occupations. The estimation results, based on data from the National Longitudinal Survey of Youth, suggest that workers' occupational self-selection leads to higher wages and lower dismissal rates in both occupations, compared to an economy in which workers are randomly assigned to each occupation. The difference in dismissal rates between the two occupations is driven by the higher expected productivity in the white collar sector. The positive effects of occupational sorting diminish as the labor market becomes increasingly characterized by moral hazard. Results also suggest that human capital investments in skills that are most relevant to blue collar jobs may generate higher wages and lower dismissal rates in both white collar and blue collar occupations. [Copyright © Elsevier]

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Bibliography Citation
Demiralp, Berna. "Occupational Self-selection in a Labor Market with Moral Hazard." European Economic Review 55,4 (May 2011): 497-519.
3. Demiralp, Berna
Occupational Self-selection in a Labor Market with Moral Hazard
Working Paper, Department of Economics, Old Dominion University, March 2007.
Also: http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID975014_code556494.pdf?abstractid=975014&mirid=1
Cohort(s): NLSY79
Publisher: Department of Economics, Old Dominion University
Keyword(s): Human Capital; Modeling, Hazard/Event History/Survival/Duration; Occupational Choice; Wage Growth; Wage Rates

Permission to reprint the abstract has not been received from the publisher.

This paper presents a model of occupational choice in a labor market characterized by moral hazard. The model demonstrates that in such a labor market, workers’ occupational choices are determined by not only their comparative advantage but also their effort decisions in each occupation. The estimation results, based on data from the National Longitudinal Survey of Youth, suggest that workers’ self-selection into white collar and blue collar occupations leads to higher wages and lower dismissal rates in both occupations. Furthermore, analysis results reveal that these effects of self-selection diminish as the labor market becomes increasingly characterized by moral hazard.
Bibliography Citation
Demiralp, Berna. "Occupational Self-selection in a Labor Market with Moral Hazard." Working Paper, Department of Economics, Old Dominion University, March 2007.