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Eisnecker, Philipp Simon & Jule Adriaans (2024): How do my earnings compare? Pay referents and just earnings. In: European Sociological Review, Jg. 40, H. 1, S. 129-142. DOI:10.1093/esr/jcad002

Abstract

"Comparisons are crucial in shaping evaluations of one’s own position. Following this notion, we investigated the role of historical, financial, partner, occupational, and regional pay referents in predicting the just gross hourly earnings in a representative sample of German workers. Looking at this broad range of pay referents, we find that higher reference earnings were generally associated with higher just earnings. In particular, controlling for actual gross hourly earnings, higher occupational, regional, and partners’ hourly earnings were associated with higher just gross hourly earnings. One’s own pay history, in form of average hourly earnings over the past 10 years, did not shape just earnings. Financial needs on the household level, however, mapped on to higher just earnings and this association was particularly pronounced among men. Overall, occupational and financial referents showed the strongest association with just earnings followed by partner earnings. These findings underscore that, while referents closely related to one’s job (e.g., occupational referents) are important, referents that extend beyond the sphere of work (e.g., regional, financial, and partner referents) are also relevant in shaping ideas of the just reward." (Author's abstract, IAB-Doku) ((en))

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Fitzenberger, Bernd, Anna Houštecká & Alexander Patt (2024): Unterschiede in den Jahresverdiensten zwischen Männern und Frauen: Der Gender Pay Gap wurde in der Coronakrise kleiner - außer bei niedrigen Verdiensten. (IAB-Kurzbericht 01/2024), Nürnberg, 8 S. DOI:10.48720/IAB.KB.2401

Abstract

"Die Geschlechterunterschiede in den Jahresverdiensten (Gender Pay Gap) spiegeln Unterschiede sowohl im Stundenlohn als auch in der Arbeitszeit und der Beschäftigungswahrscheinlichkeit wider. Je nach Verdienstniveau vor der Coronakrise waren Männer und Frauen von der Krise unterschiedlich betroffen: Während die Frauen mit mittleren und hohen Jahresverdiensten im Vergleich zu den Männern zwischen 2019 und 2021 aufholten, erfuhren die Frauen mit den niedrigsten Verdiensten deutlich stärkere Verluste als die Männer. In dem Kurzbericht wird untersucht, wie sich die Coronakrise auf die Jahresverdienste der Frauen und Männer insgesamt ausgewirkt hat und wie sich der Gender Pay Gap je nach Höhe der Verdienste und nach Beschäftigungsform (Vollzeit, Teilzeit, Minijob) entwickelt hat. Außerdem werden Übergangsraten zwischen den verschiedenen Beschäftigungsformen betrachtet." (Autorenreferat, IAB-Doku)

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Taber, Christopher, Ananth Seshadri & Xiaodong Fan (2024): Estimation of a Life-Cycle Model with Human Capital, Labor Supply, and Retirement. In: Journal of Political Economy, Jg. 132, H. 1, S. 48-95. DOI:10.1086/726232

Abstract

"We estimate a life-cycle model of consumption, human capital investment, and labor supply. The interaction between human capital and labor supply towards the end of the life cycle is most novel. The estimates replicate the main features of the data, in particular the large increase in wages and small increase in labor supply at the beginning of the life cycle and the small decrease in wages but large decrease in labor supply towards the end. We show that incorporating human capital is critical when analyzing changes to Social Security." (Author's abstract, IAB-Doku) ((en))

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Blesch, Maximilian, Philipp Eisenhauer, Peter Haan, Boryana Ilieva, Annekatrin Schrenker & Georg Weizsäcker (2023): Biased Wage Expectations and Female Labor Supply. (Discussion paper / Rationality & Competition, CCR TRR 190 411), München ; Berlin, 30 S.

Abstract

"Wage growth occurs almost exclusively in full-time work, whereas it is close to zero in part-time work. German women, when asked to predict their own potential wage outcomes, show severely biased expectations with strong over-optimism about the returns to part-time experience. We estimate a structural life-cycle model to quantify how beliefs influence labor supply, earnings and welfare over the life cycle. The bias increases part-time employment strongly, induces flatter long-run wage profiles, and substantially influences the employment effects of a widely discussed policy reform, the introduction of joint taxation. The most significant impact of the bias appears for college-educated women." (Author's abstract, IAB-Doku) ((en))

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Campanale, Claudio & Rocío Fernández-Bastidas (2023): Top earners: A labor productivity process. In: Economics Letters, Jg. 229. DOI:10.1016/j.econlet.2023.111195

Abstract

"In the present paper we compare standard wage processes used in the quantitative literature on the optimal tax progressivity and a process with heterogeneous life-cycle profiles (HIP hereafter) that we propose against the data. We find that the former fail to capture several features of the earnings dynamics at the very top of the distribution while our proposed model improves along some of these dimensions." (Author's abstract, IAB-Doku, © 2023 Elsevier) ((en))

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Deming, David J. (2023): Why Do Wages Grow Faster for Educated Workers? (NBER working paper / National Bureau of Economic Research 31373), Cambridge, Mass, 44 S.

Abstract

"The U.S. college wage premium doubles over the life cycle, from 27 percent at age 25 to 60 percent at age 55. Using a panel survey of workers followed through age 60, I show that growth in the college wage premium is primarily explained by occupational sorting. Shortly after graduating, workers with college degrees shift into professional, nonroutine occupations with much greater returns to tenure. Nearly 90 percent of life cycle wage growth occurs within rather than between jobs. To understand these patterns, I develop a model of human capital investment where workers differ in learning ability and jobs vary in complexity. Faster learners complete more education and sort into complex jobs with greater returns to investment. College acts as a gateway to professional occupations, which offer more opportunity for wage growth through on-the-job learning." (Author's abstract, IAB-Doku) ((en))

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Fackler, Daniel, Jens Stegmaier & Richard Upward (2023): Safety Net or Helping Hand? The Effect of Job Search Assistance and Compensation on Displaced Workers. (IWH-Diskussionspapiere / Leibniz-Institut für Wirtschaftsforschung Halle 2023,18), Halle, 37 S.

Abstract

"We provide the first systematic evidence on the effectiveness of a contested policy in Germany to help displaced workers. So-called “transfer companies” (Transfergesellschaften) employ displaced workers for a fixed period, during which time workers are provided with job-search assistance and are paid a wage which is a substantial fraction of their pre-displacement wage. Using rich and accurate data on workers’ employment patterns before and after displacement, we compare the earnings and employment outcomes of displaced workers who entered transfer companies with those that did not. Workers can choose whether or not to accept a position in a transfer company, and therefore we use the availability of a transfer company at the establishment level as an IV in a model of one-sided compliance. Using an event study, we find that workers who enter a transfer company have significantly worse post-displacement outcomes, but we show that this is likely to be the result of negative selection: workers who lack good outside opportunities are more likely to choose to enter the transfer company. In contrast, ITT and IV estimates indicate that the use of a transfer company has a positive and significant effect on employment rates five years after job loss, but no significant effect on earnings. In addition, the transfer company provides significant additional compensation to displaced workers in the first 12 months after job loss." (Author's abstract, IAB-Doku) ((en))

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Ozkan, Serdar, Jae Song & Fatih Karahan (2023): Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital. In: Journal of Political Economy Macroeconomics, Jg. 1, H. 3, S. 506-550. DOI:10.1086/725790

Abstract

"We study the determinants of lifetime earnings (LE) inequality in the U.S. by focusing on latent heterogeneity in job ladder dynamics and on-the-job learning as sources of wage growth differentials. Using administrative data, we finde (i) more frequent job switches among lower LE workers, mainly driven by nonemployment spells, (II) little heterogeneity in average annual earnings growth of job stayers in the bottom two-thirds of the LE distribution, and (iii) an earnings growth for job switchers that rises strongly with LE. We estimate a structural model featuring a rich set of worker types and firm heterogeneity. We find vast differences in ex-ante job ladder risk - job loss, job finding, and contact rates - across workers. These differences account for 75% of the lifetime wage growth differential among the bottom half of the LE distritubtion. Above the median, almost all lifetime wage growth differences are a result of Pareto-distributed learning ability." (Author's abstract, IAB-Doku) ((en))

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Barbieri, Paolo & Filippo Gioachin (2022): Social origin and secondary labour market entry. Ascriptive and institutional inequalities over the early career in Italy and Germany. In: Research in Social Stratification and Mobility, Jg. 77. DOI:10.1016/j.rssm.2021.100670

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Bennett, Patrick, Aline Bütikofer, Kjell G. Salvanes & Darina Steskal (2022): Changes in Urban Wages, Jobs, and Workers from 1958-2017. (CESifo working paper 9766), München, 42 S.

Abstract

"We analyze the change in the urban wage premium over the last 60 years. We focus on differences by gender and skill levels, with an emphasis on changes throughout the earnings distribution. We assess the importance of both changing selection into urban areas, as well as the importance of shifts in demand for skills. Both forces explain the dramatic drop in urban premium. Event study analysis reveals that the positive selection into urban mobility declines over time. Among men at the bottom of the distribution, changes in selection are key in accounting for the collapse of the urban wage premium." (Author's abstract, IAB-Doku) ((en))

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Bönke, Timm & Rick Glaubitz (2022): Wer gewinnt? Wer verliert? : Die Absicherung von Lebenseinkommen durch Familie und Staat. Gütersloh, 40 S. DOI:10.11586/2022033

Abstract

"Frauen können sich, auf das gesamte Erwerbsleben gerechnet, nur etwas mehr als halb so viel Bruttoeinkommen erarbeiten wie Männer. Dieser sogenannte Gender Lifetime Earnings Gap ist für Mütter noch größer. Die Studie zeigt, dass sich diese Lücke mit Blick auf die verfügbaren Einkommen und damit den tatsächlichen Lebensstandard vor allem dann schließt, wenn Frauen sich innerhalb des traditionellen Familienbilds bewegen. Werden beide Einkommen im Haushalt zwischen den Eheleuten gleichmäßig aufgeteilt, fängt das Partnereinkommen Einkommensausfälle von Müttern infolge von Erwerbsunterbrechungen, beispielsweise durch Kindererziehungszeiten, auf. Fällt diese Absicherung im Haushalt jedoch weg, kann der Staat Einkommensausfälle in der Lebensperspektive nur unzureichend kompensieren: Heute Mitte-30-jährige verheiratete Mütter und Väter haben in ihrem Haupterwerbsalter, das heißt zwischen 20 und 55 Jahren, nach Steuern und Abgaben zuzüglich Transfers und Familienleistungen jeweils rund 700.000 Euro zur Verfügung. Frauen, die überwiegend alleinerziehend sind (mehr als die Hälfte der Erziehungszeit) kommen lediglich auf rund 520.000 Euro und müssen im Vergleich zu verheirateten Müttern damit durchschnittlich Einbußen von rund 25 Prozent hinnehmen. Der tatsächliche Lebensstandard hängt also stark von der Familienkonstellation und den wohlfahrtsstaatlichen Leistungen ab. Die Studie bildet die dritte und damit letzte Publikation der Reihe „Wer gewinnt? Wer verliert?“, die langfristige Arbeitsmarkt- und (Lebens-)Einkommensentwicklungen von Frauen und Männern in Deutschland zum Gegenstand hat." (Autorenreferat, IAB-Doku)

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Glaubitz, Rick, Astrid Harnack-Eber & Miriam Wetter (2022): The gender gap in lifetime earnings: The role of parenthood. (Economics. Diskussionsbeiträge des Fachbereichs Wirtschaftswissenschaft der Freien Universität Berlin 2022,03), Berlin, 65 S.

Abstract

"To obtain a more complete understanding of the persisting gender earnings gap in Germany, this paper investigates both the cross-sectional and biographical dimension of gender inequalities. Using an Oaxaca Blinder decomposition, we show that the gender gap in annual earnings is largely driven by women's lower work experience and intensive margin of labor supply. Based on a dynamic microsimulation model, we then estimate how gender differences accumulate over work lives to account for the biographical dimension of the gender gap. We observe an average gender lifetime earnings gap of 51.5 percent for birth cohorts 1964-1972. We show that this unadjusted gender lifetime earnings gap increases strongly with the number of children, ranging from 17.8 percent for childless women to 68.0 percent for women with three or more children. However, using a counterfactual analysis we find that the adjusted gender lifetime earnings gap of 10 percent differs only slightly by women's family background." (Author's abstract, IAB-Doku) ((en))

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Jensen, Bjarne S., Peder J. Pedersen & Ross Guest (2022): Demographic Changes, Labor Supplies, Labor Complementarities, Calendar Annual Wages of Age Groups, and Cohort Life Wage Incomes. (IZA discussion paper 15127), Bonn, 68 S.

Abstract

"This paper analyzes the impact on age group wage differentials in a setting of imperfect labor substitution at different ages (years) of working life. We examine the wage prospect of assuming medium, high, and low levels of fertility during the population projection period (2020-2090). Main focus is on comparisons of selected Calendar year Age wage profiles and the comparisons of selected Cohort Lifetime wage profiles. The analytical results come from applying a CRESH Labor Aggregator to Age-group Labor supplies with a parametric calibration to register based micro data for Denmark. The results show Calendar year wage effects and Cohort wage effects from ageing that will not exist without non-zero Labor Complementarity elasticities, and are new contributions demonstrating the economic effects of large/small generations and cohort sizes. The impact of cohort size on the lifetime wage profile of its own cohort does depend on sizes of other cohorts, which are affected by the fertility rates underlying many cohorts. Hence, economic advantages of being a small cohort depend on fertilities and the sizes of many other existing cohorts." (Author's abstract, IAB-Doku) ((en))

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Mahajan, Parag, Dhiren Patki & Heiko Stüber (2022): Bad Times, Bad Jobs? How Recessions Affect Early Career Trajectories. (Working paper / Federal Reserve Bank of Dallas, Research Department 22-12), Boston, 21 S. DOI:10.29412/res.wp.2022.12

Abstract

"Studies find that if a worker enters the labor market during an economic downturn versus a period of expansion, they likely will have more difficulty finding a high-paying job, because the availability of such jobs is strongly procyclical. The earnings penalty for starting a career during bad times is both substantial and persistent. Indeed, this paper finds that a typical recession causes entrants to experience a 6 percent loss in earnings cumulated over the first 15 years of their careers. But, the authors ask, to what extent do non-pecuniary characteristics of jobs offset some of those earnings losses? They address this question by relying on population-scale linked employer-employee administrative data from Germany to estimate both the pecuniary and non-pecuniary impact of entering the workforce during a recession." (Author's abstract, IAB-Doku) ((en))

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Raitano, Michele & Francesca Subioli (2022): School-to-work transition, early career outcomes and income dynamics across cohorts in Italy: does education pay? In: International Journal of Manpower, Jg. 44, H. 6, S. 1000-1027. DOI:10.1108/IJM-06-2021-0394

Abstract

"Purpose: The work compares across cohorts and different levels of education the early-stage evolution of several labour market outcomes, with the aim of studying whether and to what extent education matters for the level, growth and stability of earnings. Design/methodology/approach By using a rich longitudinal dataset developed from merging survey and administrative data, this article describes the evolution of the early career – five years following the education completion – in Italy comparing differently educated workers born between 1970 and 1984. Findings The authors find evidence of an "education premium” during the first five years after education completion in terms of faster school-to-work transition, higher employability and higher earnings; moreover, education is associated with positive, faster and more volatile earnings growth, while for those experiencing a downward trend education does not appear to play any role. However, no clear-cut changes across cohorts in the association between the various outcomes and the level of education emerge, thus signalling that no continuous rise of skill premia in the first phase of the working career across cohorts characterises the Italian economy. Originality/value The main originality consists in investigating the early career stage by cohort and by the level of education with a focus on many multi-year individual outcomes. Besides investigating the evolution of aggregate outcomes for differently educated individuals born in different cohorts, the authors also focus on individual earnings dynamics along the five years after the education completion." (Author's abstract, IAB-Doku, © Emerald Group) ((en))

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Stüber, Heiko (2022): Berufsspezifische Lebensentgelte: Ein Studium garantiert nicht immer das höchste Lebensentgelt. (IAB-Kurzbericht 18/2022), Nürnberg, 8 S. DOI:10.48720/IAB.KB.2218

Abstract

"„Studium oder Ausbildung?“ – vor der Frage stehen nicht nur betroffene Jugendliche, sie wird auch vielfach in Politik und Presse diskutiert. Gleichzeitig wird das Thema Fachkräftemangel immer präsenter. Abiturientinnen und Abiturienten etwa entscheiden sich, neben anderen Gründen, häufig aufgrund potenzieller Verdienstmöglichkeiten für ein Studium und gegen eine Ausbildung. Bei der Berechnung der Brutto-Lebensentgelte für Vollzeitbeschäftige betrachtet der Autor neben der formalen Qualifikation der Beschäftigten auch das Anforderungsniveau des ausgeübten Berufs. Die Untersuchungsergebnisse zeigen: Zwar gilt im Durchschnitt, dass mit einem Studium das höchste Brutto-Lebensentgelt erzielt wird, das ist jedoch nicht immer der Fall." (Autorenreferat, IAB-Doku)

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Zühlke, Anne, Philipp Kugler, Armin Hackenberger & Tobias Brändle (2022): Accounting for dropout risk and upgrading in educational choices: new evidence for lifetime returns in Germany. In: Education Economics, Jg. 30, H. 6, S. 574-589. DOI:10.1080/09645292.2021.2013446

Abstract

"We analyse the economic returns in lifetime labour income of various educational paths in Germany. Using recent data, we calculate cumulative labour earnings at different ages and for different educational paths while controlling the parental background of individuals. We find that after the age of 55, lifetime labour income is higher for individuals with a university degree compared to individuals with a vocational degree. Considering the risk of dropout and the possibility of educational upgrading, individuals who start with a vocational training after their school degree do not earn less than individuals who start with university studies." (Author's abstract, IAB-Doku) ((en))

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Bartels, Charlotte & Daniel Waldenström (2021): Inequality and top incomes. (GLO discussion paper / Global Labor Organization 959), Essen, 39 S.

Abstract

"This chapter comprises three main parts. The first part is about data sources, the definitions of income, and the methodologies used to estimate top income shares. Both the standard sources and methods used by the traditional top income studies are described. Further, new developments that employ new sources and estimation approaches are added, a detailed survey of the top-correction methods for surveys including reweighting and replacing top incomes is provided and approaches to align surveys, income tax data, and national accounts are contrasted. The second part of the chapter is a description of the main trends of top income shares that are the result of the previous studies. Different measures discussed in the methods section are presented and compared. The third part of the chapter surveys the literature on the determinants of top income shares. The focus of the third part is on studies that propose new methods to establish links between driving factors and top income shares." (Author's abstract, IAB-Doku) ((en))

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Braxton, J. Carter, Kyle F. Herkenhoff, Jonathan L. Rothbaum & Lawrence Schmidt (2021): Changing Income Risk across the US Skill Distribution: Evidence from a Generalized Kalman Filter. (NBER working paper 29567), Cambridge, Mass, 106 S. DOI:10.3386/w29567

Abstract

"For whom has earnings risk changed, and why? To answer these questions, we develop a filtering method that estimates parameters of an income process and recovers persistent and temporary earnings for every individual at every point in time. Our estimation flexibly allows for first and second moments of shocks to depend upon observables as well as spells of zero earnings (i.e., unemployment) and easily integrates into theoretical models. We apply our filter to a unique linkage of 23.5m SSA-CPS records. We first demonstrate that our earnings-based filter successfully captures observable shocks in the SSA-CPS data, such as job switching and layoffs. We then show that despite a decline in overall earnings risk since the 1980s, persistent earnings risk has risen for both employed and unemployed workers, while temporary earnings risk declined. Furthermore, the size of persistent earnings losses associated with full year unemployment has increased by 50%. Using geography, education, and occupation information in the SSA-CPS records, we refute hypotheses related to declining employment prospects among routine and low-skill workers as well as spatial theories related to the decline of the Rust-Belt. We show that rising persistent earnings risk is concentrated among high-skill workers and related to technology adoption. Lastly, we find that rising persistent earnings risk while employed (unemployed) leads to welfare losses equivalent to 1.8% (0.7%) of lifetime consumption, and larger persistent earnings losses while unemployed lead to a 3.3% welfare loss." (Author's abstract, IAB-Doku) ((en))

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Dilger, Alexander (2021): Einkommenssteigerung durchs Studium als wichtiges Maß. (Discussion Papers of the Institute for Organisational Economics 2021,9), Münster, 13 S.

Abstract

"Die akademische Qualität der Lehre lässt sich nur schwer messen. Dagegen ist es relativ einfach, die späteren Einkommenszuwächse durch ein Studium zu bestimmen. Das ist für private wie staatliche Allokationsentscheidungen wichtig, etwa ob jemand aus finanziellen Gründen studieren soll, was und wo, während gegebene staatliche Mittel für Studienplätze effizient eingesetzt und zusätzliche Mittel gerechtfertigt werden können, wenn sie mehr bringen als kosten." (Autorenreferat, IAB-Doku)

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Fernandes, Sofia & Ilan Tojerow (2021): Flexible Wages and the Costs of Job Displacement. (IZA discussion paper 14942), Bonn, 61 S.

Abstract

"This paper investigates whether flexible pay increases the wage costs of job displacement. We use quasi-exogenous variation in the timing of job loss due to mass layoffs spanning over an institutional reform that restricted single-employer bargaining, the Belgian Wage Norm in 1996. We find that average earnings losses over a ten-year period after displacement are 10 percentage points larger under flexible pay. Workers displaced from jobs with higher employer-specific wage premiums—service sector and white-collar—benefit the most from restricted single-employer bargaining as their earnings fully converge to non-displaced workers' earnings within three years. We show that the differences in earnings losses across wage-setting systems are not driven by fluctuations in the business cycle. Finally, the wage-setting reform had similar effects on female workers, though it did not narrow the gender gap in pre-layoff wages. Our results suggest that reduced pay flexibility may help displaced workers catch up faster to non-displaced workers' pay premium ladder conditional on re-employment." (Author's abstract, IAB-Doku) ((en))

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Jost, Oskar (2021): Unemployment and its scarring effect on wages in Germany: evidence from linked employer-employee data. In: International Journal of Manpower, Jg. 43, H. 5, S. 1126-1143., 2021-12-01. DOI:10.1108/IJM-02-2021-0065

Abstract

"Purpose: Assess and compare scarring effects of unemployment in Germany to other countries and to consider firm heterogeneity. Design/methodology/approach: The author uses linked employer-employee data to analyze the effect of unemployment and its duration on future wages in Germany. Using administrative data on workers and firms in Germany and considering registered and unregistered unemployment episodes, the results show long-lasting wage losses caused by unemployment incidences. Furthermore, the estimations indicate that unemployment duration as well as selectivity into firms paying lower wages is of particular relevance for the explanation of wage penalties of re-employed workers. Findings: Unemployment causes massive and persistent wage declines in the future, which depend on the unemployment duration. Furthermore, reduced options of unemployed workers and selectivity in firms contribute to a large part of unemployment scarring. Practical implications: Findings are relevant for current debates on unemployment and can help design measures to avoid huge costs of unemployment. Originality/value: This paper analyses long-term unemployment scarring by considering not only unemployment duration but also selectivity in firms and its effect on the scarring effect." (Author's abstract, IAB-Doku, © Emerald Group) ((en))

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Niehues, Judith & Maximilian Stockhausen (2021): DINK(Y)s und HIKOs: Welche Haushalte gehören zur Einkommensspitze. (IW-Kurzberichte / Institut der Deutschen Wirtschaft Köln 2021,96), Köln, 5 S.

Abstract

"Paarhaushalte ohne Kinder sind im oberen Einkommensbereich am häufigsten vertreten. Unter Ihnen verfügen DINK(Y)s - Double Income, No Kids (Yet) - also Haushalte, die nie Kinder hatten oder noch keine Kinder haben, im Durchschnitt über das höchste Nettoeinkommen. Unter den einkommensstärksten 10 Prozent sind sie überrepräsentiert. Noch häufiger sind jedoch HIKOs im oberen Einkommensbereich vertreten: Das sind Paare mit hohen Einkommen, deren Kinder nicht (mehr) im elterlichen Haushalt leben - High Income, Kids Out. Dies gilt insbesondere für das Top-1-Prozent der Einkommensverteilung." (Autorenreferat, IAB-Doku)

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Salvanes, Kjell G., Barton Willage & Alexander L. P. Willén (2021): The Effect of Labor Market Shocks across the Life Cycle. (CESifo working paper 9491), München, 65 S.

Abstract

"Adverse economic shocks occur frequently and may cause individuals to reevaluate key life decisions in ways that have lasting consequences for themselves and the economy. These life decisions are fundamentally tied to specific periods of an individual's career, and economic shocks may therefore have substantially different impacts on individuals – and the broader economy - depending on when they occur. We exploit mass layoffs and establishment closures to examine the impact of adverse shocks across the life cycle on labor market outcomes and major life decisions: human capital investment, mobility, family structure, and retirement. Our results reveal substantial heterogeneity on labor market effects and life decisions in response to economic shocks across the life cycle. Individuals at the beginning of their careers invest in human capital and relocate to new labor markets, individuals in the middle of their careers reduce fertility and adjust family formation decisions, and individuals at the end of their careers permanently exit the workforce and retire. As a consequence of the differential interactions between economic shocks and life decisions, the very long-term career implications of labor shocks vary considerably depending on when the shock occurs. We conclude that effects of adverse labor shocks are both more varied and more extensive than has previously been recognized, and that focusing on average effects among workers across the life cycle misses a great deal." (Author's abstract, IAB-Doku) ((en))

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Bönke, Timm, Astrid Harnack & Miriam Wetter (2020): Wer gewinnt? Wer verliert? : Die Entwicklung auf dem deutschen Arbeitsmarkt seit den frühen Jahren der Bundesrepublik bis heute. Gütersloh, 53 S. DOI:10.11586/2019014

Abstract

"Auf das gesamte Erwerbsleben gerechnet, verdienen Frauen nur etwas mehr die Hälfte der Erwerbseinkommen der Männer. Ausgedrückt in absoluten Zahlen erzielen Frauen in Westdeutschland in Preisen von 2015 ein erwartetes durchschnittliches Lebenserwerbseinkommen von rund 830.000 Euro, während Männer mit durchschnittlich rund 1,5 Millionen Euro rechnen können. In Ostdeutschland fallen die erwarteten Lebenserwerbseinkommen insgesamt geringer aus. Frauen kommen hier auf rund 660.000 Euro, Männer auf knapp 1,1 Millionen Euro. Die Lücke in den Lebenserwerbseinkommen, der sogenannte Gender Lifetime Earnings Gap, beträgt damit für die jüngsten Jahrgänge, die heute Mitte 30-Jährigen, 45 Prozent in West- und 40 Prozent in Ostdeutschland. Wie groß die Kluft ist, verdeutlicht auch die Betrachtung nach Qualifikationsniveau: Bis zum Geburtsjahrgang 1974 erzielen hochqualifizierte Frauen im Durchschnitt nur so viel Erwerbseinkommen wie geringqualifizierte Männer. Jüngere Akademikerinnen können immerhin ein ähnliches Lebenserwerbseinkommen wie mittelqualifizierte Männer erwarten und holen damit etwas auf." (Textauszug, IAB-Doku)

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Bönke, Timm & Holger Lüthen (2020): Die Ungleichheit von Lebenserwerbseinkommen. In: Wirtschaftsdienst, Jg. 100, H. 4, S. 241-245. DOI:10.1007/s10273-020-2625-3

Abstract

"In den letzten Jahrzehnten hat sich der deutsche Arbeitsmarkt in seiner Struktur stark gewandelt – nicht nur durch technologischen Fortschritt oder Globalisierung, sondern auch durch institutionelle Änderungen wie die zunehmende Deregulierung. Gleichzeitig wird spätestens seit den 1980er Jahren ein deutlicher Anstieg der Einkommensungleichheit dokumentiert. Um strukturelle Veränderungen über lange Zeiträume besser erfassen zu können, sollten Querschnittsanalysen daher um das Betrachten gesamter Erwerbsverläufe ergänzt werden. Dies ermöglicht Vergleiche von Lebenserwerbseinkommen, die widerspiegeln, was ein Individuum über sein gesamtes Erwerbsleben verdient hat. Eine solche Analyse kann zeigen, inwiefern langfristige Trends einzelne Generationen treffen und ob bestimmte Entwicklungen über Generationen hinweg Auswirkungen haben und/oder wahrscheinlich haben werden." (Textauszug, IAB)

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Flores, Manuel, Pilar García-Gómez & Adriaan Kalwij (2020): Early life circumstances and labor market outcomes over the life cycle. In: Journal of Economic Inequality, Jg. 18, H. 4, S. 449-468. DOI:10.1007/s10888-020-09446-7

Abstract

"Some consequences of adverse events early in life for labor market outcomes may emerge early and others only later in adult life. We use data from the Survey of Health, Ageing and Retirement in Europe to investigate how early life circumstances - childhood health and socioeconomic status (SES) - are associated with various labor market outcomes over an individual's entire life cycle. Our main new finding is that these associations change significantly over the life cycle. For instance, the association of childhood SES with lifetime earnings is shown to become stronger over the life cycle and to operate through both working years and annual earnings. We discuss how our findings can explain some of the mixed evidence on these associations in previous literature. Our results also shed light on the potential gains in the different labor market outcomes of public policies that invest in children's health and parents' SES." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Frodermann, Corinna, Katharina Wrohlich & Aline Zucco (2020): Parental leave reform and long-run earnings of mothers. (DIW-Diskussionspapiere 1847), Berlin, 44 S.

Abstract

"Paid parental leave schemes have been shown to increase women's employment rates but decrease their wages in case of extended leave durations. In view of these potential trade-offs, many countries are discussing the optimal design of parental leave policies. We analyze the impact of a major parental leave reform on mothers' long-term earnings. The 2007 German parental leave reform replaced a means-tested benefit with a more generous earnings-related benefit that is granted for a shorter period of time. Additionally, a 'daddy quota' of two months was introduced. To identify the causal effect of this policy on long-run earnings of mothers, we use a difference-in-difference approach that compares labor market outcomes of mothers who gave birth just before and right after the reform and nets out seasonal effects by including the year before. Using administrative social security data, we confirm previous findings and show that the average duration of employment interruptions increased for high-income mothers. Nevertheless, we find a positive long-run effect on earnings for mothers in this group. This effect cannot be explained by changes in working hours, observed characteristics, changes in employer stability or fertility patterns. Descriptive evidence suggests that the stronger involvement of fathers, incentivized by the 'daddy months', could have facilitated mothers' re-entry into the labor market and thereby increased earnings. For mothers with low prior-to-birth earnings, however, we do not find any beneficial labor market effects of this parental leave reform." (Author's abstract, IAB-Doku) ((en))

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Bayer, Christian & Moritz Kuhn (2019): Which ladder to climb? Decomposing life cycle wage dynamics. (IZA discussion paper 12473), Bonn, 65 S.

Abstract

"Wages grow and become more unequal as workers age. Economic theory focuses on worker investment in human capital, search for employers, and residual wage shocks to account for these life cycle wage dynamics. We highlight the importance of jobs: collections of tasks and duties defined by employers within the production process. We provide empirical evidence that climbing the career ladder toward jobs characterized by more responsibility, complexity, and autonomy accounts for the largest part of life cycle wage dynamics. It accounts for 50% of average wage growth, 50% of rising differences between gender, and virtually all of rising dispersion within gender over the life cycle." (Author's abstract, IAB-Doku) ((en))

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Bonneuil, Noël (2019): Health component of inequalities associated with income mobility over the life cycle. In: Social indicators research, Jg. 141, H. 1, S. 391-411. DOI:10.1007/s11205-017-1771-5

Abstract

"From the two-wave French Health and Professional Career survey in 2006 and 2010, the income distribution associated with income mobility between these two dates shows that income inequalities are smaller than those observed cross-sectionally in 2006 and in 2010. Income mobility between 2006 and 2010 implies a more egalitarian distribution than is observed at either of these dates. The upward gradient in observed inequalities over the life cycle no longer holds true for the distribution of inequalities associated with the conditions of the moment. Ill health still favors inequality, particularly because health is worst at low incomes. Ill health exacerbates inequalities, an effect that is larger the more inegalitarian the income distribution." (Author's abstract, © Springer-Verlag) ((en))

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Brändle, Tobias, Philipp Kugler, Anne Zühlke, Armin Hackenberger, Manuel Schick & Susanne Vögele (2019): Lebenseinkommen von Berufsausbildung und Hochschulstudium im Vergleich. Eine empirische Analyse von Erwerbsbiografien in Deutschland. Tübingen, 74 S.

Abstract

"Zusammenfassend lassen sich folgende Ergebnisse festhalten: In Bezug auf die deskriptiven Ergebnisse wurde ersichtlich, dass Personen mit Meister-/Technikerabschluss über ihr Erwerbsleben hinweg ähnlich viel verdienen wie Personen mit abgeschlossenem Hochschulstudium. Daran anschließend verdienen Personen mit einem Meister-/Technikerabschluss immer mehr als Personen mit einer abgeschlossenen Berufsausbildung, während Personen mit abgeschlossenem Hochschulstudium bis zu einem Alter von 36 Jahren weniger verdienen als Personen mit einer abgeschlossenen Berufsausbildung, danach verdienen sie mehr. Betrachtet man Personen, die ein Hochschulstudium beginnen, verschiebt sich der Break-Even-Punkt im Vergleich zu Personen, die eine Berufsausbildung beginnen, nach hinten. Personen, die ein Hochschulstudium beginnen, verdienen erst ab einem Alter von 39 Jahren mehr. Personen, die eine Berufsausbildung beginnen oder abschließen, verdienen immer mehr als Personen ohne Ausbildung. Bei der Betrachtung der Bildungspfade zeigt sich, dass es sich nach einer Berufsausbildung genauso sehr lohnt einen Meister oder Techniker zu machen wie ein Hochschulstudium anzuschließen. Insbesondere fallen bei ersteren weniger Opportunitätskosten an. Zudem verdienen Personen, die vor einem Hochschulstudium eine Berufsausbildung beginnen, ähnlich viel wie Personen, die direkt studieren. In der Höhe der kumulierten Lebenseinkommen zeigen sich vor allem Geschlechterdifferenzen, jedoch auch Unterschiede zwischen den Wirtschaftszweigen. So verdienen Männer über alle Analysegruppen hinweg mehr als Frauen. Ebenso verdienen Personen, die im Verarbeitenden Gewerbe tätig sind, unabhängig von der Analysegruppe am besten. Die Unterschiede zwischen höchstem Bildungsabschluss oder der ersten Bildungsentscheidung nach der Schule sind jedoch in den Teilstichproben ähnlich wie in der Gesamtstichprobe. Insbesondere zeigt sich auch, dass die Unterschiede im Lebenseinkommen zwischen Personen mit und ohne Berufsausbildung in den früheren Kohorten sowie im Verarbeitenden Gewerbe kleiner sind als in der Gesamtstichprobe." (Textauszug, IAB-Doku)

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Charni, Kadija (2019): Can cohort effects explain the decline of earnings for older workers? Evidence from France and Great Britain. In: Labour, Jg. 33, H. 3, S. 306-350. DOI:10.1111/labr.12149

Abstract

"Classical literature takes cross-sectional age-earnings profile to describe how earnings evolve over the lifecycle. Using a cohort analysis, I argue that this interpretation of age-earnings profile is not correct. I show that cohort effects largely explain the decline observed at older ages using a rotating panel data for France and a longitudinal panel data for Great Britain for the period 1991 - 2007. I find no clear evidence that earnings decline at older age, although the profiles are different between countries. Earnings rise linearly with age in France, whereas it becomes flat for older workers in Great Britain." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Kiessling, Lukas, Pia Pinger, Philipp Seegers & Jan Bergerhoff (2019): Gender differences in wage expectations. Sorting, children, and negotiation styles. (IZA discussion paper 12522), Bonn, 50 S.

Abstract

"This paper presents evidence from a large-scale study on gender differences in expected wages before labor market entry. Based on data for over 15,000 students, we document a significant and large gender gap in wage expectations that closely resembles actual wage differences, prevails across subgroups, and along the entire distribution. To understand the underlying causes and determinants, we relate expected wages to sorting into majors, industries, and occupations, child-rearing plans, perceived and actual ability, personality, perceived discrimination, and negotiation styles. Our findings indicate that sorting and negotiation styles affect the gender gap in wage expectations much more than prospective child-related labor force interruptions. Given the importance of wage expectations for labor market decisions, household bargaining, and wage setting, our results provide an explanation for persistent gender inequalities." (Author's abstract, IAB-Doku) ((en))

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Merkurieva, Irina (2019): Late career job loss and the decision to retire. In: International Economic Review, Jg. 60, H. 1, S. 259-282. DOI:10.1111/iere.12352

Abstract

"This article provides an empirical analysis of the effect of involuntary job loss on the lifetime income and labor supply of older workers. I develop and estimate a dynamic programming model of retirement with savings, costly job search, and exogenous layoffs. The average cost of job loss is equivalent to one year of predisplacement earnings, 70% due to the wage reduction and 30% to the search frictions. Displaced workers on average retire 14 months earlier. Workers who approached retirement during the Great Recession will work approximately five months longer in response to the contemporaneous financial and labor market shocks." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Pettinicchi, Yuri & Axel Börsch-Supan (2019): Long-term effects of different labour careers. In: A. Börsch-Supan, J. Bristle, K. Andersen-Ranberg, A. Brugiavini, F. Jusot, H. Litwin & G. Weber (Hrsg.) (2019): Health and socio-economic status over the life course : First results from SHARE Waves 6 and 7, S. 109-117. DOI:10.1515/9783110617245-011

Abstract

"This chapter computes the share of active labour market participation during an individual's life course. We also count the number of job spells to distinguish workers with dynamic careers, that is, workers who changed several jobs over a lifetime. On the one hand, jobs changes may imply income improvements attributable to promotion or better matching. On the other hand, a large number of job changes may also be attributable to many exits from and re-entries into the labour market that are likely to reduce income growth over the life cycle. We identify four categories of labour careers: always active individuals with one job spell, always active individuals with several job spells, seldom active individuals with one job spell and seldom active individuals with several job spells." (Text excerpt, IAB-Doku) ((en))

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Rözer, Jesper & Thijs Bol (2019): Labour market effects of general and vocational education over the life-cycle and across time. Accounting for age, period, and cohort effects. In: European Sociological Review, Jg. 35, H. 5, S. 701-717. DOI:10.1093/esr/jcz031

Abstract

"A recent literature argues that the labour market returns to vocational education vary over the life cycle. Graduates with an occupation-specific educational degree have a smooth transition into the labour market but experience difficulties later in their career when their specific skills become obsolete. This life course penalty to vocational education is expected to be particularly strong in periods of rapid technological change. Existing literature has mostly studied this topic from the perspective of age effects but focused less on cohort and period effects. Moreover, it is unclear to what extent lower returns to vocational education in the late career vary across time periods. Using Labour Force Survey data for the Netherlands (1996-2012) we find that having a more occupation-specific educational degree increases the likelihood of being employed in early life and lowers the average job status. This initial advantage of a higher employment probability declines with age, and the disadvantage in job status increases as workers grow older. We find that these life-cycle effects have not, or only marginally, changed over time." (Author's abstract, IAB-Doku) ((en))

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Zanker, Dagmar & Christin Czaplicki (2019): Die Erhebung von Erwerbsverläufen und Rentenanwartschaften im In- und Ausland. Ein Vergleich von Personen mit und ohne Migrationserfahrung. In: Sozialer Fortschritt, Jg. 68, H. 11, S. 867-886. DOI:10.3790/sfo.68.11.867

Abstract

"Der Beitrag widmet sich der Diskussion zur Erhebung von Erwerbsverläufen sowie Rentenanwartschaften im In- und Ausland und präsentiert Ergebnisse der Studie 'Lebensverläufe und Altersvorsorge' (LeA), die von der Deutschen Rentenversicherung Bund zusammen mit dem Bundesministerium für Arbeit und Soziales in Auftrag gegeben wurde. LeA ist eine repräsentative Erhebung (2016) der Lebens- und Erwerbsverläufe sowie des Altersvorsorgeverhaltens der 40- bis unter 60-Jährigen in Deutschland. Der Beitrag gibt Einblicke in das Design und die Inhalte der Studie und zeigt die Herausforderungen bei der Erhebung von ausländischen Rentenanwartschaften auf. Weiter steht die Frage im Fokus, inwiefern sich Erwerbsverläufe sowie In- und Auslandsrentenanwartschaften von Personen mit und ohne Migrationserfahrung unterscheiden. Zentral ist dabei, ob im Ausland erworbene Rentenanwartschaften - so sie vorhanden sind - geringe(re) Inlandsrentenanwartschaften kompensieren können." (Autorenreferat, IAB-Doku)

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Albu, Nora, Alexander Herzog-Stein, Ulrike Stein & Rudolf Zwiener (2018): Arbeits- und Lohnstückkostenentwicklung 2017 im europäischen Vergleich. (IMK Report 142), Düsseldorf, 23 S.

Abstract

"Von 2000 bis 2008, als die Reallöhne und die Lohnstückkosten stagnierten, nahm die Zahl der sozialversicherungspflichtig Beschäftigten um rund 130 000 Personen ab, während die Zahl der ausschließlich geringfügig entlohnt Beschäftigten um rund 650 000 Personen zulegte. In der Folgeperiode mit wieder steigenden Reallöhnen nahm dann aber die sozialversicherungspflichtige Beschäftigung um 4,5 Mio. Personen zu, während die ausschließlich geringfügig entlohnte Beschäftigung wieder deutlich zurückging. Das zeigt, dass es in einer großen Volkswirtschaft aussichtslos ist, einseitig auf Lohnkostenvorteile und Erfolge im Außenhandel zu setzen, weil durch die entsprechend schwächere Binnennachfrage unter dem Strich Wachstum und Beschäftigung verloren gehen." (Textauszug, IAB-Doku)

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Bartik, Timothy J. & Brad J. Hershbein (2018): Degrees of poverty: The relationship between family income background and the returns to education. (Upjohn Institute working paper 284), Kalamazoo, Mich., 53 S. DOI:10.17848/wp18-284

Abstract

"Drawing on the Panel Study of Income Dynamics, we document a startling empirical pattern: the career earnings premium from a four-year college degree (relative to a high school diploma) for persons from low-income backgrounds is considerably less than it is for those from higher-income backgrounds. For individuals whose family income in high school was above 1.85 times the poverty level, we estimate that career earnings for bachelor's graduates are 136 percent higher than earnings for those whose education stopped at high school. However, for individuals whose family income during high school was below 1.85 times the poverty level, the career earnings of bachelor's graduates are only 71 percent higher than those of high school graduates. This lower premium amounts to $300,000 less in career earnings in present discounted value. We establish the prevalence and robustness of these differential returns to education across race and gender, finding that they are driven by whites and men and by differential access to the right tail of the earnings distribution." (Author's abstract, IAB-Doku) ((en))

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Bingley, Paul & Lorenzo Cappellari (2018): Workers, firms and life-cycle wage dynamics. (IZA discussion paper 11402), Bonn, 44 S.

Abstract

"Studies of individual wage dynamics typically ignore firm heterogeneity, whereas decompositions of earnings into worker and firm effects abstract from life-cycle considerations. We study firm effects in individual wage dynamics using administrative data on the population of Italian employers and employees. We propose a novel identification strategy for firm-related wage components exploiting the informative content of the wage covariance structure of coworkers. Wage inequality increases three-fold over the working life; firm effects are predominant while young, but sorting of workers into firms becomes increasingly important, explaining the largest share of lifetime inequality. Static models that do not allow for life-cycle dynamics underestimate the importance of sorting and overstate match and firm effects." (Author's abstract, IAB-Doku) ((en))

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Bleakley, Hoyt (2018): Longevity, education, and income. How large is the triangle? (NBER working paper 24247), Cambrige, Mass., 63 S. DOI:10.3386/w24247

Abstract

"While health affects economic development and wellbeing through a variety of pathways, one commonly suggested mechanism is a 'horizon' channel in which increased longevity induces additional education. A recent literature devotes much attention to how much education responds to increasing longevity, while this study asks instead what impact this specific channel has on wellbeing (welfare). I note that death is like a tax on human-capital investments, which suggests the use of a standard public-economics tool: triangles. I construct estimates of the triangle gain if education adjusts to lower adult mortality. Even for implausibly large responses of education to survival differences, almost all of today's low-human-development countries, if switched instantaneously to Japan's survival curve, would place a value on this channel of less than 15% of income. Calibrating the model with well-identified micro- and cohort-level studies, I find that the horizon triangle for the typical low-income country is instead less than a percent of lifetime income. Gains from increased survival in the 20th-century are similarly sized." (Author's abstract, IAB-Doku) ((en))

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Brady, David, Marco Giesselmann, Ulrich Kohler & Anke Radenacker (2018): How to measure and proxy permanent income: evidence from Germany and the U.S. In: Journal of Economic Inequality, Jg. 16, H. 3, S. 321-345. DOI:10.1007/s10888-017-9363-9

Abstract

"Permanent income (PI) is an enduring concept in the social sciences and is highly relevant to the study of inequality. Nevertheless, there has been insufficient progress in measuring PI. We calculate a novel measure of PI with the German Socio-Economic Panel (SOEP) and U.S. Panel Study of Income Dynamics (PSID). Advancing beyond prior approaches, we define PI as the logged average of 20+ years of post-tax and post-transfer (“post-fisc”) real equivalized household income. We then assess how well various household- and individual-based measures of economic resources proxy PI. In both datasets, post-fisc household income is the best proxy. One random year of post-fisc household income explains about half of the variation in PI, and 2–5 years explain the vast majority of the variation. One year of post-fisc HH income even predicts PI better than 20+ years of individual labor market earnings or long-term net worth. By contrast, earnings, wealth, occupation, and class are weaker and less cross-nationally reliable proxies for PI. We also present strategies for proxying PI when HH post-fisc income data are unavailable, and show how post-fisc HH income proxies PI over the life cycle. In sum, we develop a novel approach to PI, systematically assess proxies for PI, and inform the measurement of economic resources more generally." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Dillon, Eleanor Wiske (2018): Risk and return trade-offs in lifetime earnings. In: Journal of labor economics, Jg. 36, H. 4, S. 981-1021. DOI:10.1086/697475

Abstract

"This paper documents differences in lifetime earnings risk across occupations due to wage risk, employment risk, and mid-career occupation changes, which can mitigate other shocks. Total lifetime earnings risk varies considerably across starting occupation and riskier occupations pay more in expectation. The average worker would give up at least 9% of total lifetime earnings in the least certain occupation in order to reduce the riskiness of that occupation to the level of the safest starting occupation. The insurance value of occupational mobility is quantitatively important. With mobility, workers absorb only 60%, on average, of negative occupation-specific wage shocks." (Author's abstract, IAB-Doku) ((en))

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Frommert, Dina & Ralf K. Himmelreicher (2018): Alterseinkünfte im Wandel. In: Deutsche Rentenversicherung, Jg. 73, H. 1, S. 22-65.

Abstract

"In dem folgenden Beitrag werden die Alterseinkünfte von in Deutschland lebenden Personen im Alter von 60 bis einschließlich 69 Jahren untersucht. Die dargestellten Befunde basieren auf drei derzeit verfügbaren Erhebungen der Studie 'Alterssicherung in Deutschland' (ASID) aus den Jahren 2003, 2007 und 2011. Auf Grundlage dieser Daten ist es möglich, unterschiedliche Quellen der Alterseinkünfte zu unterscheiden und herauszuarbeiten, welches Gewicht unterschiedliche Vorsorgeformen für bestimmte Personengruppen haben. Ein Vergleich der Höhe der Alterseinkünfte zwischen Frauen und Männern in West- und Ostdeutschland zeigt, dass der sogenannte Gender Pension Gap im Westen wesentlich größer ist als im Osten, und zwar insbesondere dann, wenn die Alterseinkünfte eher niedrig sind. Hinsichtlich der Zusammensetzung der Alterseinkünfte wird deutlich, dass zusätzliche betriebliche und private Altersvorsorge eher von Personen praktiziert wurde, die vergleichsweise hohe Anwartschaften in der gesetzlichen Rentenversicherung haben. Personen mit niedrigen gesetzlichen Renten haben häufig nicht weiter vorgesorgt. Falls doch, dann haben sie eher Anwartschaften in der privaten als in der betrieblichen Altersvorsorge. Die Auszahlungsbeträge fallen aber eher gering aus. Im zeitlichen Verlauf zeigen sich uneinheitliche Tendenzen. Insbesondere in Ostdeutschland nimmt die Verbreitung der betrieblichen Altersversorgung zu, gleichzeitig zeigt sich für die private Vorsorge ein rückläufiger Trend über die drei betrachteten Zeitpunkte." (Autorenreferat, IAB-Doku)

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Ge, Suqin, Elliott Isaac & Amalia Miller (2018): Elite schools and opting-in: Effects of college selectivity on career and family outcomes. (NBER working paper 25315), Cambrige, Mass., 42 S. DOI:10.3386/w25315

Abstract

"Using College and Beyond data and a variant on Dale and Krueger's (2002) matched-applicant approach, this paper revisits the question of how attending an elite college affects later-life outcomes. We expand the scope along two dimensions: we do not restrict the sample to full-time full-year workers and we examine labor force participation, human capital, and family formation. For men, our findings echo those in Dale and Krueger (2002): controlling for selection eliminates the positive relationship between college selectivity and earnings. We also find no significant effects on men's educational or family outcomes. The results are quite different for women: we find effects on both career and family outcomes. Attending a school with a 100-point higher average SAT score increases women's probability of advanced degree attainment by 5 percentage points and earnings by 14 percent, while reducing their likelihood of marriage by 4 percentage points. The effect of college selectivity on own earnings is significantly larger for married than for single women. Among married women, selective college attendance significantly increases spousal education." (Author's abstract, IAB-Doku) ((en))

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Gensowski, Miriam (2018): Personality, IQ, and lifetime earnings. In: Labour economics, Jg. 51, H. April, S. 170-183. DOI:10.1016/j.labeco.2017.12.004

Abstract

"This paper estimates the effects of personality traits and IQ on lifetime earnings of the men and women of the Terman study, a high-IQ U.S. sample. Age-by-age earnings profiles allow a study of when personality traits affect earnings most, and for whom the effects are strongest. I document a concave life-cycle pattern in the payoffs to personality traits, with the largest effects between the ages of 40 and 60. An interaction of traits with education reveals that personality matters most for highly educated men. The largest effects are found for Conscientiousness, Extraversion, and Agreeableness (negative), where Conscientiousness operates partly through education, which also has significant returns." (Author's abstract, © 2017 Elsevier) ((en))

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Jessen, Robin & Johannes König (2018): Hours risk, wage risk, and life-cycle labor supply. (Ruhr economic papers 771), Essen, 32 S.

Abstract

"We decompose permanent earnings risk into contributions from hours and wage shocks. In order to distinguish between hours shocks and labor supply reactions to wage shocks we use a life-cycle model of consumption and labor supply. Estimating our model with the Panel Study of Income Dynamics (PSID) shows that both permanent wage and hours shocks play an important role in explaining the cross-sectional variance in earnings growth, but wage risk has greater relevance. Allowing for hours shocks improves the model fit considerably. The empirical strategy allows for the estimation of the Marshallian labor supply elasticity without the use of consumption or asset data. We find this elasticity on average to be negative, but small. The degree of consumption insurance implied by our results is in line with recent estimates in the literature." (Author's abstract, IAB-Doku) ((en))

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Lefranc, Arnaud (2018): Intergenerational earnings persistence and economic inequality in the long-run. Evidence from French cohorts, 1931-1975. (IZA discussion paper 11406), Bonn, 49 S.

Abstract

"This paper analyzes long-term trends in intergenerational earnings persistence in France for male cohorts born between 1931 and 1975. This time period has witnessed important changes in the French labor market and educational system, in particular an important compression of earnings differentials as well as a large expansion in access to secondary and higher education. Using a two-sample instrumental variables approach, I estimate two measures of intergenerational economic persistence: the intergenerational earnings elasticity (IGE) and the intergenerational correlation (IGC). Over the period, the IGE exhibits a V-shaped pattern. It falls from a high of value of .6 for cohorts born in the 1930s to around .4 for those born in the 1950s, but subsequently rises to a level close to the beginning of the period. In contrast, the IGC remains relatively stable over the period. This suggests that changes in the IGE are partly driven by transitory responses to changes in cross-sectional inequality rather than long-term changes in the degree of intergenerational persistence." (Author's abstract, IAB-Doku) ((en))

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Magnac, Thierry, Nicolas Pistolesi & Sébastien Roux (2018): Post-schooling human capital investments and the life cycle of earnings. In: Journal of Political Economy, Jg. 126, H. 3, S. 1219-1249. DOI:10.1086/697206

Abstract

"We propose an original model of human capital investments after leaving school in which individuals differ in their initial human capital obtained at school, their rates of return and costs of human capital investments, and their terminal values of human capital at an arbitrary date in the future. We derive a tractable reduced-form Mincerian model of log earnings profiles along the life cycle that is written as a linear factor model in which levels, growth, and curvature of earnings profiles are individual specific. This provides a structural interpretation of results obtained in the empirical literature on the dynamics of earnings and acknowledges its limitations." (Author's abstract, IAB-Doku) ((en))

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Migali, Guiseppe & Ian Walker (2018): Estimates of the causal effects of education on earnings over the life cycle with cohort effects and endogenous education. In: CESIfo Economic Studies, Jg. 64, H. 3, S. 516-544. DOI:10.1093/cesifo/ifx020

Abstract

"We estimate the wage premia associated with educational attainments focusing on the life cycle pattern of earnings. We employ a model where educational attainment is discrete and ordered and log wages are determined by a simple function of work experience for each level of attainment. We distinguish between life cycle and cohort effects by exploiting the fact that we have a short panel. We find that age-earnings profiles lose the traditional bell shape and become flat when we allow for cohort differences. Females still have higher college premia compared to males. However, there are clear earnings inequalities between cohorts with smaller college premia for younger compared to older cohorts, for both males and females." (Author's abstract, IAB-Doku) ((en))