Search Results

Source: Review of Economic Dynamics
Resulting in 11 citations.
1. Barlevy, Gadi
Nagaraja, H.N.
Estimating Mobility Rates in Search Models with Initial Condition Problems
Review of Economic Dynamics 13,4 (October 2010): 780-799. Also:http://www.sciencedirect.com/science/article/pii/S1094202509000672
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Job Search; Job Tenure; Job Turnover; Mobility; Modeling, Hazard/Event History/Survival/Duration; Wage Differentials; Wage Growth

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

Previous empirical work on job search has proposed different approaches to estimating mobility rates assumed in models of search. However, these methods either only work for specific models of wage determination, or else require that we know the initial distribution of productivity for workers in our sample. In this paper we show it is possible to estimate mobility rates without having to restrict attention to models in which wages are constant over the course of a job or to assume that the initial distribution of productivity is known. More generally, the approach we propose allows us to freely estimate one degree of unobserved heterogeneity, be it in initial conditions or mobility rates. Applying our results to data from the NLSY suggests that the theoretical restrictions on the initial distribution of productivity implied by the standard model can overstate the extent of frictions to upward mobility.
Bibliography Citation
Barlevy, Gadi and H.N. Nagaraja. "Estimating Mobility Rates in Search Models with Initial Condition Problems ." Review of Economic Dynamics 13,4 (October 2010): 780-799. Also:http://www.sciencedirect.com/science/article/pii/S1094202509000672.
2. Braun, Christine
Crime and the Minimum Wage
Review of Economic Dynamics 32 (April 2019): 122-152.
Also: https://www.sciencedirect.com/science/article/pii/S1094202518302941
Cohort(s): NLSY97
Publisher: Society for Economic Dynamics
Keyword(s): Crime; Geocoded Data; Labor Market Outcomes; Minimum Wage; State-Level Data/Policy

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

How does the minimum wage affect crime rates? Empirical research suggests that increasing a worker's wage can deter him from committing crimes. On the other hand, if that worker becomes displaced as a result of the minimum wage, he may be more likely to commit a crime. In this paper, I describe a frictional world in which a worker's criminal actions are linked to his labor market outcomes. The model is calibrated to match labor market outcomes and crime decisions of workers from the National Longitudinal Survey of Youth 1997, and shows that the relationship between the aggregate crime rate and the minimum wage is U-shaped. The results from the calibrated model, as well as empirical evidence from county level crime data and state level minimum wage changes from 1995 to 2014, suggest that the crime minimizing minimum to median wage ratio for 16 to 19 year olds is 0.91. However, the welfare maximizing minimum to median wage ratio is 0.87, not equal to the crime minimizing value. The median wage of 16 to 19 year olds in the United States in 2018 was $10, suggesting that any federal minimum wage increase up to $8.70 may be welfare improving.
Bibliography Citation
Braun, Christine. "Crime and the Minimum Wage." Review of Economic Dynamics 32 (April 2019): 122-152.
3. Carrillo-Tudela, Carlos
Smith, Eric
Search Capital
Review of Economic Dynamics 23 (January 2017): 191-211.
Also: http://www.sciencedirect.com/science/article/pii/S1094202516300345
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Employment, History; Job Search

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

This paper first documents the extent of return employment: workers returning to employers they worked for previously within the same employment spell. Employer returns are typically involuntary and lead to lower earnings. To understand these features, the paper then develops an equilibrium model of worker recall and on-the-job search in which job seekers hold onto information they acquire about job opportunities as insurance in the event of a job destruction shock. Allowing workers to recall contacts increases the probability of a job-to-job transition with the number of jobs previously held during the employment spell while the probability of an job-to-unemployment transition decreases. These transition patterns are consistent with empirical evidence.
Bibliography Citation
Carrillo-Tudela, Carlos and Eric Smith. "Search Capital." Review of Economic Dynamics 23 (January 2017): 191-211.
4. Castex, Gonzalo
College Risk and Return
Review of Economic Dynamics 26 (October 2017): 91-112.
Also: http://www.sciencedirect.com/science/article/pii/S109420251730039X
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Armed Forces Qualifications Test (AFQT); Cognitive Ability; College Dropouts; College Education; Educational Returns; Family Income

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

A large number of studies report high returns to college education. However, a large fraction of high school graduates do not pursue higher education. To reconcile these facts, I develop a heterogeneous-agent life-cycle model with endogenous college enrollment and uninsurable risk of college completion. The risk of failing to complete college explains 14% (18%) of returns to a 4-year (2-year) college. Risk premium varies with individual ability and family income. Using the model, I analyze how costs and benefits of college education affect enrollments and dropouts. Model predictions are consistent with trends in enrollment and dropout observed in the data and findings in related literature.
Bibliography Citation
Castex, Gonzalo. "College Risk and Return." Review of Economic Dynamics 26 (October 2017): 91-112.
5. Flinn, Christopher
Gemici, Ahu
Laufer, Steven
Search, Matching and Training
Review of Economic Dynamics 25 (April 2017): 260-297.
Also: http://www.sciencedirect.com/science/article/pii/S1094202517300224
Cohort(s): NLSY97
Publisher: Society for Economic Dynamics
Keyword(s): Human Capital; Modeling; Training; Transition, Job to Job; Wage Growth

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

We estimate a partial and general equilibrium search model in which firms and workers choose how much time to invest in both general and match-specific human capital. To help identify the model parameters, we use NLSY data on worker training and we match moments that relate the incidence and timing of observed training episodes to outcomes such as wage growth and job-to-job transitions. We use our model to offer a novel interpretation of standard Mincer wage regressions in terms of search frictions and returns to training. Finally, we show how a minimum wage can reduce training opportunities and decrease the amount of human capital in the economy.
Bibliography Citation
Flinn, Christopher, Ahu Gemici and Steven Laufer. "Search, Matching and Training." Review of Economic Dynamics 25 (April 2017): 260-297.
6. Gilleskie, Donna B.
Han, Euna
Norton, Edward C.
Disentangling the Contemporaneous and Dynamic Effects of Human and Health Capital on Wages over the Life Cycle
Review of Economic Dynamics 25 (April 2017): 350-383.
Also: http://www.sciencedirect.com/science/article/pii/S1094202517300418
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Body Mass Index (BMI); Human Capital; Life Cycle Research; Wage Levels; Wage Penalty/Career Penalty; Wages, Women; Weight

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

We quantify the life-cycle effects of human and health capital on the wage distribution of women, with a focus on health capital measured by body mass. We use NLSY79 data on women followed annually up to twenty years during the time of their lives when average annual weight gain is greatest. We measure the wage impact of current body mass (i.e., the contemporaneous or direct effect) while controlling for observed measures of human capital (namely, educational attainment, employment experience, marital status tenure, and family size) and the impacts of an evolving body mass (i.e., the dynamic or indirect effects) on the endogenous histories of behaviors that produce these human capital stocks. We find significant differences in the contemporaneous and dynamic effects of body mass on wages by age, by race, and by wage level.
Bibliography Citation
Gilleskie, Donna B., Euna Han and Edward C. Norton. "Disentangling the Contemporaneous and Dynamic Effects of Human and Health Capital on Wages over the Life Cycle." Review of Economic Dynamics 25 (April 2017): 350-383.
7. Hai, Rong
Heckman, James J.
Inequality in Human Capital and Endogenous Credit Constraints
Review of Economic Dynamics 25 (April 2017): 4-36.
Also: http://www.sciencedirect.com/science/article/pii/S1094202517300029
Cohort(s): NLSY97
Publisher: Society for Economic Dynamics
Keyword(s): Age at First Intercourse; Armed Services Vocational Aptitude Battery (ASVAB); Behavior, Violent; Cognitive Ability; Credit/Credit Constraint; Debt/Borrowing; Educational Attainment; Human Capital; Net Worth; Parental Investments; Wealth

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

This paper investigates the determinants of inequality in human capital with an emphasis on the role of the credit constraints. We develop and estimate a model in which individuals face uninsured human capital risks and invest in education, acquire work experience, accumulate assets and smooth consumption. Agents can borrow from the private lending market and from government student loan programs. The private market credit limit is explicitly derived by extending the natural borrowing limit of Aiyagari (1994) to incorporate endogenous labor supply, human capital accumulation, psychic costs of working, and age. We quantify the effects of cognitive ability, noncognitive ability, parental education, and parental wealth on educational attainment, wages, and consumption. We conduct counterfactual experiments with respect to tuition subsidies and enhanced student loan limits and evaluate their effects on educational attainment and inequality. We compare the performance of our model with an influential ad hoc model in the literature with education-specific fixed loan limits. We find evidence of substantial life cycle credit constraints that affect human capital accumulation and inequality. The constrained fall into two groups: those who are permanently poor over their lifetimes and a group of well-endowed individuals with rising high levels of acquired skills who are constrained early in their life cycles. Equalizing cognitive and noncognitive ability has dramatic effects on inequality. Equalizing parental backgrounds has much weaker effects. Tuition costs have weak effects on inequality. Note: Previously published as NBER Working Paper No. 22999, December 2016.
Bibliography Citation
Hai, Rong and James J. Heckman. "Inequality in Human Capital and Endogenous Credit Constraints." Review of Economic Dynamics 25 (April 2017): 4-36.
8. Lise, Jeremy
Meghir, Costas
Robin, Jean-Marc
Matching, Sorting and Wages
Review of Economic Dynamics 19 (January 2016): 63-87.
Also: http://www.sciencedirect.com/science/article/pii/S109420251500071X
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Employment, History; Job Search; Modeling; Wage Determination

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

We develop an empirical search-matching model which is suitable for analyzing the wage, employment and welfare impact of regulation in a labor market with heterogeneous workers and jobs. To achieve this we develop an equilibrium model of wage determination and employment which extends the current literature on equilibrium wage determination with matching and provides a bridge between some of the most prominent macro models and microeconometric research. The model incorporates productivity shocks, long-term contracts, on-the-job search and counter-offers. Importantly, the model allows for the possibility of assortative matching between workers and jobs due to complementarities between worker and job characteristics. We use the model to estimate the potential gain from optimal regulation and we consider the potential gains and redistributive impacts from optimal unemployment benefit policy. Here optimal policy is defined as that which maximizes total output and home production, accounting for the various constraints that arise from search frictions. The model is estimated on the NLSY using the method of moments.
Bibliography Citation
Lise, Jeremy, Costas Meghir and Jean-Marc Robin. "Matching, Sorting and Wages." Review of Economic Dynamics 19 (January 2016): 63-87.
9. Mustre-Del-Rio, Jose
Wealth and Labor Supply Heterogeneity
Review of Economic Dynamics 18,3 (July 2015): 619-634.
Also: http://www.sciencedirect.com/science/article/pii/S1094202514000519
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Heterogeneity; Labor Supply; Modeling; Wages; Wealth

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

This paper examines the importance of ex-ante heterogeneity for understanding the relationship between wealth and labor supply when markets are incomplete. An infinite horizon model is estimated where labor supply is indivisible and households are ex-ante heterogeneous in their labor disutility and market skills. The model replicates key features of the distribution of employment, wages, and wealth observed in the data. Importantly, it reverses the prediction that employment falls with wealth, a pervasive feature of models without ex-ante heterogeneity. A byproduct of the model's empirical performance is that it implies labor supply responses to unanticipated wages changes (e.g., Frisch elasticities) that are a half to two-thirds of those recovered from models with only ex-post heterogeneity.
Bibliography Citation
Mustre-Del-Rio, Jose. "Wealth and Labor Supply Heterogeneity." Review of Economic Dynamics 18,3 (July 2015): 619-634.
10. Navarro, Salvador
Zhou, Jin
Identifying Agent's Information Sets: An Application to a Lifecycle Model of Schooling, Consumption and Labor Supply
Review of Economic Dynamics 25 (April 2017): 58-92.
Also: http://www.sciencedirect.com/science/article/pii/S1094202517300297
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Assets; College Education; High School Completion/Graduates; Household Income; Life Cycle Research; Panel Study of Income Dynamics (PSID); Wages

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

We adapt the insight of Cunha et al. (2005) to develop a methodology that distinguishes information unknown to the econometrician but forecastable by the agent from information unknown to both, at each point in an agent's lifecycle. Predictable variability and uncertainty have different implications in terms of welfare, especially when markets are incomplete. We apply our procedure in the context of an incomplete markets lifecycle model of consumption, labor supply, and schooling decisions, when borrowing limits arise from repayment constraints. Using microdata on earnings, hours worked, schooling choices, and consumption of white males in the US, we infer the agent's information set. We then estimate the model using the identified agent's information set. We find that 52% and 56% of the variance of college and high school log wages respectively are predictable by the agent at the time schooling choices are made. When we complete the market, college attendance increases from 48% to 59%, about half of this increase is due to uncertainty, and the other half because of the borrowing limits. To illustrate the importance of assumptions about what is forecastable by the agent, we simulate a minimum wage insurance policy under different assumptions about the information available to the agents in the model. When we allow for asymmetric information between the insurance institution and the individual, adverse selection turns profits negative. Consumer welfare, however, increases by about 28% when we give individuals access to their estimated information set regardless of asymmetries.
Bibliography Citation
Navarro, Salvador and Jin Zhou. "Identifying Agent's Information Sets: An Application to a Lifecycle Model of Schooling, Consumption and Labor Supply." Review of Economic Dynamics 25 (April 2017): 58-92.
11. Sheran, Michelle Elizabeth
Career and Family Choices of Women: A Dynamic Analysis of Labor Force Participation, Schooling, Marriage, and Fertility Decisions
Review of Economic Dynamics 10,3 (July 2007): 367-399
Cohort(s): NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Career Patterns; Fertility; Human Capital; Labor Economics; Labor Force Participation; Labor Market, Secondary; Life Cycle Research; Marriage; Schooling

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

This paper formulates and estimates a discrete time, discrete choice dynamic labor supply model in which marriage, fertility, and education are choice variables. The dynamics of these choices are captured by various forms of state and duration dependence. Uncertainty comes from the imperfect control women have over births and from a choice-specific random shock to utility each period. Women choose different career and family life-cycle paths because of these uncertainties and also because they have different tastes. The structural parameters of the model are estimated using maximum likelihood estimation techniques with data from the National Longitudinal Survey of Youth. [Copyright 2007 Elsevier]

Copyright of Review of Economic Dynamics is the property of Academic Press Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts)

Bibliography Citation
Sheran, Michelle Elizabeth. "Career and Family Choices of Women: A Dynamic Analysis of Labor Force Participation, Schooling, Marriage, and Fertility Decisions." Review of Economic Dynamics 10,3 (July 2007): 367-399 .