IDEAS home Printed from https://ideas.repec.org/p/red/sed016/1204.html
   My bibliography  Save this paper

A Model of Human Capital Formation and Contractual Unpredictability

Author

Listed:
  • Nick Frazier

    (Rice University)

  • Flavio Cunha

    (Rice univesity)

Abstract

We study the effect of restricting the contracting space within a partial equilibrium environment. We develop a model of human capital accumulation where jobs have multiple characteristics including variability in hours and wages. We highlight the difficulties of using standard panel data to estimate and distinguish between worker preferences and the primitives of the offer function --- an issue with serious implications when comparing employee welfare. We propose using stated preferences data to trace out worker preferences over a variety of job attributes which we then take to the NLSY97 to recover the parameters underlying the distribution of job offers allowing for dependence on accumulated human capital. This approach provides a richer characterization of the process and permits us to quantify the effect of restricting the offer space on the labor force directly.

Suggested Citation

  • Nick Frazier & Flavio Cunha, 2016. "A Model of Human Capital Formation and Contractual Unpredictability," 2016 Meeting Papers 1204, Society for Economic Dynamics.
    • Handle: RePEc:red:sed016:1204
    as

    Download full text from publisher

    File URL: https://red-files-public.s3.amazonaws.com/meetpapers/2016/paper_1204.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hans G. Bloemen, 2008. "Job Search, Hours Restrictions, and Desired Hours of Work," Journal of Labor Economics, University of Chicago Press, vol. 26(1), pages 137-179.
    2. Richard Blundell & Mike Brewer & Marco Francesconi, 2008. "Job Changes and Hours Changes: Understanding the Path of Labor Supply Adjustment," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 421-453, July.
    3. Russell Cooper & John Haltiwanger & Jonathan L. Willis, 2007. "Implications of Search Frictions: Matching Aggregate and Establishment-level Observations," NBER Working Papers 13115, National Bureau of Economic Research, Inc.
    4. John A. List, 2001. "Do Explicit Warnings Eliminate the Hypothetical Bias in Elicitation Procedures? Evidence from Field Auctions for Sportscards," American Economic Review, American Economic Association, vol. 91(5), pages 1498-1507, December.
    5. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
    6. Alan Manning, 1995. "How Do We Know That Real Wages Are Too High?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1111-1125.
    7. Cooper, Russell & Haltiwanger, John & Willis, Jonathan L., 2007. "Search frictions: Matching aggregate and establishment observations," Journal of Monetary Economics, Elsevier, vol. 54(Supplemen), pages 56-78, September.
    8. Rosen, Sherwin, 1987. "The theory of equalizing differences," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 12, pages 641-692, Elsevier.
    9. O. Ashenfelter & R. Layard (ed.), 1987. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 2, number 2.
    10. O. Ashenfelter & R. Layard (ed.), 1987. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 1, number 1.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," SciencePo Working papers Main hal-04067393, HAL.
    2. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," Working Papers hal-04067393, HAL.
    3. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    4. Schneck, Stefan, 2011. "The acceptance of earnings losses after voluntary mobility," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 5, pages 1-47.
    5. Moser, Christian, 2016. "How Could Wage Inequality Within and Across Enterprises be Reduced?," MPRA Paper 95381, University Library of Munich, Germany.
    6. D’Ambrosio, Anna & Leombruni, Roberto & Razzolini, Tiziano, 2017. "Native-Migrant Differences in Trading Off Wages and Workplace Safety," IZA Discussion Papers 10523, Institute of Labor Economics (IZA).
    7. John DiNardo & David S. Lee, 2010. "Program Evaluation and Research Designs," Working Papers 1228, Princeton University, Department of Economics, Industrial Relations Section..
    8. Daniel Borowczyk-Martins & Etienne Lalé, 2019. "Employment Adjustment and Part-Time Work: Lessons from the United States and the United Kingdom," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(1), pages 389-435, January.
    9. Sergio Firpo & Sandro Carvalho & Renan Pieri, 2016. "Using occupational structure to measure employability with an application to the Brazilian labor market," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(1), pages 1-19, March.
    10. DiNardo, John & Lee, David S., 2011. "Program Evaluation and Research Designs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 5, pages 463-536, Elsevier.
    11. Jantsch, Antje & Wunder, Christoph & Hirschauer, Norbert, 2016. "Lebensqualität In Deutschland – Ein Vergleich Von Ländlichen Und Städtischen Regionen," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244798, German Association of Agricultural Economists (GEWISOLA).
    12. Alejandro Donado, 2021. "Why do they JUST DO IT? A Theory of Outsourcing and Working Conditions," Open Economies Review, Springer, vol. 32(3), pages 559-586, July.
    13. H. Xavier Jara, 2015. "The Effect of Job Insecurity on Labour Supply," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 18(2), pages 187-204.
    14. Kai Liu, 2016. "Explaining the gender wage gap: Estimates from a dynamic model of job changes and hours changes," Quantitative Economics, Econometric Society, vol. 7(2), pages 411-447, July.
    15. Milenko POPOVIĆ & Kruna RATKOVIĆ, 2013. "Oversupply Of Labor And Other Peculiarities Of Arts Labor Market," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 4(2), pages 204-230.
    16. Juliane Scheffel, 2011. "How do Unusual Working Schedules Affect Social Life?," SFB 649 Discussion Papers SFB649DP2011-025, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    17. Federico Di Pace & Matthias Hertweck, 2019. "Labor Market Frictions, Monetary Policy, and Durable Goods," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 32, pages 274-304, April.
    18. Ilhom Abdulloev & Ira N Gang & Myeong-Su Yun, 2014. "Migration, Education and the Gender Gap in Labour Force Participation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 26(4), pages 509-526, September.
    19. Lechthaler, Wolfgang & Merkl, Christian & Snower, Dennis J., 2010. "Monetary persistence and the labor market: A new perspective," Journal of Economic Dynamics and Control, Elsevier, vol. 34(5), pages 968-983, May.
    20. Richard Blundell & Monica Costa Dias & Costas Meghir & Jonathan Shaw, 2016. "Female Labor Supply, Human Capital, and Welfare Reform," Econometrica, Econometric Society, vol. 84, pages 1705-1753, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed016:1204. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.