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Explaining Individual Job Separations in a Segregated Labor Market

  • Anders Frederiksen

    (Aarhus University and IZA)

In this paper, individual job separations are analyzed using employer-employee data. The analysis is conducted within the framework of a simple theoretical model in which the value of the match between the worker and the firm is a function of the individual component and the firm component. This partition is important in an empirical context because of labor market segregation. In particular, we argue that failure to account for both the individual and the firm component simultaneously produce incorrect conclusions. One example is that in conventional studies, where only the individual component is included, women will have higher separation probabilities than men. However, when we take into account that women work in small low-paying firms, this result vanishes. To further investigate employment stability, information on the labor market states subsequent to a job separation is introduced. This additional information reveal that the population of currently working women relative to men is more likely to separate from a job, become unemployed, and leave the labor market because of less attractive match characteristics. A decomposition reveals that 25 percent of the gender stability gap is due to differences in the individual components and the remaining 75 percent can be attributed to differences in the firm component.

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Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 869.

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Date of creation: Aug 2004
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Handle: RePEc:pri:indrel:490
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  1. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  2. Light, Audrey & Ureta, Manuelita, 1992. "Panel Estimates of Male and Female Job Turnover Behavior: Can Female Nonquitters Be Identified?," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 156-81, April.
  3. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, December.
  4. Christopher A. Pissarides, 1994. "Search Unemployment with On-the-job Search," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 457-475.
  5. Francine D. Blau & Lawrence M. Kahn, 1981. "Race and Sex Differences in Quits by Young Workers," ILR Review, Cornell University, ILR School, vol. 34(4), pages 563-577, July.
  6. Idson, Todd L, 1989. "Establishment Size Differentials in Internal Mobility," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 721-24, November.
  7. Kenneth R Troske & Kimberly N Bayard & Judith Hellerstein & David Neumark, 1998. "New Evidence On Sex Segregation And Sex Differences In Wages From Matched Employee-Employer Data," Working Papers 98-18, Center for Economic Studies, U.S. Census Bureau.
  8. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  9. Royalty, Anne Beeson, 1998. "Job-to-Job and Job-to-Nonemployment Turnover by Gender and Education Level," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 392-443, April.
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