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Explaining Individual Job Separations in a Segregated Labor Market

Author

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  • Anders Frederiksen

    (Aarhus University and IZA)

Abstract

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.

Suggested Citation

  • Anders Frederiksen, 2004. "Explaining Individual Job Separations in a Segregated Labor Market," Working Papers 869, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:490
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    References listed on IDEAS

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    1. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics," Introductory Chapters,in: Robert Gibbons & John Roberts (ed.), The Handbook of Organizational Economics Princeton University Press.
    2. Christopher A. Pissarides, 1994. "Search Unemployment with On-the-job Search," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 457-475.
    3. Anders Frederiksen & Niels Westergaard-Nielsen, 2002. "Where did they go?," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 D3-2, International Conferences on Panel Data.
    4. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, January.
    5. 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.
    6. Idson, Todd L, 1989. "Establishment Size Differentials in Internal Mobility," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 721-724, November.
    7. 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.
    8. 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.
    9. Gupta, Nabanita Datta, 1993. "Probabilities of Job Choice and Employer Selection and Male-Female Occupational Differences," American Economic Review, American Economic Association, vol. 83(2), pages 57-61, May.
    10. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
    11. 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.
    12. 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 156-181, April.
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    Cited by:

    1. Frederiksen, Anders & Honore, Bo E. & Hu, Luojia, 2007. "Discrete time duration models with group-level heterogeneity," Journal of Econometrics, Elsevier, vol. 141(2), pages 1014-1043, December.
    2. Cornelissen, Thomas & Hübler, Olaf, 2007. "Unobserved Individual and Firm Heterogeneity in Wage and Tenure Functions: Evidence from German Linked Employer-Employee Data," IZA Discussion Papers 2741, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    employer-employee data; job separations; labor reallocation;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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