How amenities affect job and wage choices over the life cycle
The current wage at a job may not fully reflect the "value" of that job. For example, a job with a low starting wage may be preferred to one with a high starting wage if the growth rate of wages is higher in the former than in the latter. In fact, differences in wage growth can potentially explain why a worker might want to quit a high-paying job for one with a lower starting wage. Job amenities are another important factor that not only influences the value of a job but also provides an independent rationale for why workers change jobs. Including a job's amenities as part of its "value" can also generate a move from high-paying to low-paying jobs (or vice versa) as part of an optimal consumption plan over the life cycle. Both the direction of movement and the timing of a job change depend critically on the relationship between a worker's rate of time preference and the market interest rate.
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- Joseph G. Altonji & Christina H. Paxson, 1987.
"Labor Supply Preferences, Hours Constraints, and Hours-Wage Tradeoffs,"
NBER Working Papers
2121, National Bureau of Economic Research, Inc.
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- Matthew S. Dey & Christopher J. Flinn, 2005.
"An Equilibrium Model of Health Insurance Provision and Wage Determination,"
Econometric Society, vol. 73(2), pages 571-627, 03.
- Dey, M. S. & Flinn, C. J., 2000. "An Equilibrium Model of Health Insurance Provision and Wage Determination," Working Papers 00-18, C.V. Starr Center for Applied Economics, New York University.
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