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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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Loisiel, Tristan & Michaël Sicsic (2023): Income mobility in France between 2003 and 2020. (INSEE documents de travail / Institut National de la Statistique et des Etudes Economiques 2023-19), Paris, 51 S.

Abstract

"How do individual positions in the income distribution change over life? So far, it has proven difficult to answer this question in the absence of a long-term income panel, but new longitudinal income tax records from 2003 to 2020 now enable to analyze the long-term income mobility, as well as its impact on inequality measurement over the whole period. We find a high rank-rank correlation of 0.71 between 2003-2004 and 2019-2020 for those age 25-49 in 2003. Inertia is particularly strong at the top and the bottom of the distribution: among the top 20% and the bottom 20% of the income distribution, almost two-thirds remain in the same quintile 16 years later. Mobility appears to be lower in France than in the United States. However, mobility is higher for the self-employed than for employees, and the young are also more mobile. Inhabitants of the largest areas persist more at the top of the distribution and experience more upward mobility. These results are robust to the income definition considered. Moreover, taking individual mobility into account when measuring income inequality hardly differs from income inequality as conventionally measured: a Gini index based on average individual income over the period is 7% lower than the Gini index based on annual income." (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 & 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)