A general equilibrium analysis of parental leave policies
An important feature of the U.S. labor market is that, even after controlling for measurable differences in education and experience, the average wage of women with children is 89 percent of the average wage of women without children. This "family gap" in wages accounts for almost half the gender gap in wages. Proponents of mandatory-leave policies argue that career interruptions associated with fertility have long-lasting effects on female employment and are costly in terms of human-capital losses for females. Despite the fact that mandatory leaves are widely applied in developed ...
A quantitative theory of the gender gap in wages
Using panel data from the National Longitudinal Survey of Youth (NLSY), we document that gender differences in wages almost double during the first 20 years of labor market experience and that there are substantial gender differences in employment and hours of work during the life cycle. A large portion of gender differences in labor market attachment can be traced to the impact of children on the labor supply of women. We develop a quantitative life-cycle model of fertility, labor supply, and human capital accumulation decisions. We use this model to assess the role of fertility on gender ...
Changes in job quality and trends in labor hours
Many economic models featuring labor supply decision, especially in macroeconomic analysis, assume away heterogeneity in the nature of work, or assume that the nature of work is irrelevant to the labor/leisure choice. This paper studies the macroeconomic implications of relaxing this assumption. Estimation from micro data using labor hours, wages, consumption, and nonpecuniary job characteristics suggests that labor supply responds to differences and to changes in the nature of work. Ceteris paribus, some job characteristics induce more labor hours than others do. Labeling the jobs that embed ...
Sand in the wheels of the labor market: the effect of firing costs on employment
This paper examines the effects of firing costs in a dynamic general equilibrium model where firms face stochastic demand. It derives analytically two simple closed-form equations, one for the supply of labor, the other for its demand. These equations determine the comparative static effects of changes in firing costs on the labor market. When negative shocks are more likely to occur than positive shocks, and when the frequency of these shocks is high, firing costs have a substantial negative impact on aggregate employment. In addition, product market integration, as it has occurred in the ...
The relocation decisions of working couples
Most prime-age married couples in the U.S. today have two labor force participants. Migration decisions are more complicated for two-earner couples than for one-earner couples because any gain from moving that accrues to one spouse must be great enough to offset any loss to the other spouse. This paper estimates the extent to which internal migration is depressed by rising earnings equality among spouses. The results indicate that couples' migration propensities are substantially lower the more equal spouses' labor incomes.
A cohort-based model of labor force participation
The probability that an individual participates in the labor force declines precipitously beyond age 50. This feature of labor supply suggests that ongoing shifts in the age distribution of the population will put substantial downward pressure on the aggregate labor force participation rate. However, the aggregate rate is also influenced by trends within age groups. Neglecting to model both within-group influences and shifting population shares will doom any estimate of aggregate labor supply. We develop a model that identifies birth cohorts' propensities to participate, uses these ...
Inferring labor income risk and partial insurance from economic choices
This paper uses the information contained in the joint dynamics of individuals? labor earnings and consumption-choice decisions to quantify both the amount of income risk that individuals face and the extent to which they have access to informal insurance against this risk. We accomplish this task by using indirect inference to estimate a structural consumption-savings model, in which individuals both learn about the nature of their income process and partly insure shocks via informal mechanisms. In this framework, we estimate (i) the degree of partial insurance, (ii) the extent of systematic ...
Boomerang kids: labor market dynamics and moving back home
This paper examines the relationship between the dynamics of parent-youth living arrangements and labor market outcomes for youths who do not go to college in the United States. The data come from a newly constructed panel data set based on retrospective monthly coresidence questions in the NLSY97. This is the first data set containing information on the labor market circumstances of youths at the time of movements in and out of the parental home. Based on estimates from duration models that allow for unobserved heterogeneity, I find that moving from employment to non-employment increases the ...
Job polarization in the region
Remarks at the Quarterly Regional Economic Press Briefing, New York City.
Do immigrants work in riskier jobs?
Recent media and government reports suggest that immigrants are more likely to hold jobs with worse working conditions than U.S.-born workers, perhaps because immigrants work in jobs that "natives don?t want." Despite this widespread view, earlier studies have not found immigrants to be in riskier jobs than natives. This study combines individual-level data from the 2003-2005 American Community Survey with Bureau of Labor Statistics data on work-related injuries and fatalities to take a fresh look at whether foreign-born workers are employed in more dangerous jobs. The results indicate ...