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Job separations, heterogeneity, and earnings inequality

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  • Pedro S. Amaral

Abstract

Changes in the fraction of workers experiencing job separations can account for> most of the increase in earnings dispersion that occurred both between, as well as> within educational groups in the United States from the mid-1970s to the mid-> 1980s. This is not true of changes in average earnings losses following job separations.> A search model with exogenous human capital accumulation calibrated> to match some selected moments of the U.S. labor market is used to measure the> effects of changes in the fraction of workers experiencing job separations (extensive> margin) versus changes in average earnings losses following job separations> (intensive margin). While both margins do well in accounting for the increase in> the college premium, only the changes in the extensive margin do well in accounting> for the increases in the variance of both the permanent and transitory> components of earnings.

Suggested Citation

  • Pedro S. Amaral, 2009. "Job separations, heterogeneity, and earnings inequality," Working Papers (Old Series) 0910, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:0910
    DOI: 10.26509/frbc-wp-200910
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    Keywords

    Wages; Income distribution;

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