{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

22 Lecture%20Turnover%20Joblock%202010%20for%20post

22 Lecture%20Turnover%20Joblock%202010%20for%20post -...

Info icon This preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
LECTURE 22 TURNOVER AND JOB LOCK
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
LAST TIME Unemployment Insurance Temporary income assistance to unemployed workers Effect on job search: increase asking wage and unemployment duration Positive – better match between workers and firms Negative – disincentive to seek employment
Image of page 2
ANNOUNCEMENTS Problem Set 5 due next Thursday (11/18) Today Long term effects of unemployment Turnover Job lock
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
EMPIRICAL EVIDENCE What do we expect? Take-up rates? Who will be new takers? Findings: Little evidence that telephone/web filing increased take-up Nor did fraction of high wage takers increase
Image of page 4
WHAT EFFECT DOES UI HAVE ON FIRM BEHAVIOR? Firms want to layoff workers during periods of slow demand May be less costly to rehire the same workers What will happen to wages if worker knows firm has high layoff rate? barb2right compensating wage differential What happens with UI? State is covering part of differential Incentive for firms to abuse system
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
EXPERIENCE RATING Measure to reduce firm moral hazard Firms that have more layoffs pay higher UI payroll tax Those firms that have more layoffs, pay more, but imperfect Why need UI if compensating differential exists?
Image of page 6
LONG-TERM EFFECTS OF UNEMPLOYMENT AND JOB LOSS Short-term effect No wage income Maybe some income replaced by UI We saw most unemployment spells are less than 5 weeks A little bad luck not have a large impact on lifetime earnings What if Unemployment spell changes earnings trajectory?
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
VON WACHTER AND BENDER Examine the outcomes of young workers in Germany Compare wages of “unlucky” job losers to those that keep jobs Important confounds Job losers are adversely selected Most losers are from firms with high turnover – lower quality workers may select into these firms Find 15% earnings reduction, but fades after 5 years
Image of page 8
VON WACHTER, OREOPOULOS, HEISZ Question: What is the long term impact of a recession for college grads entering the labor market? Look at employer-employee matched data for workers in Canada Findings: 9% decrease in earnings, halved after 5 years, faded after 10 Improvement comes by moving to better firms Worse for those that are “lower ability” More on this: http://www.kqed.org/epArchive/R902130900
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
EVIDENCE THAT JOB LOSS IS A BAD SIGNAL?
Image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern