Unemployment risk and wage differentials

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dc.contributor.author Pinheiro, Roberto
dc.contributor.author Visschers, Ludo
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned 2012-03-16T13:42:24Z
dc.date.available 2012-03-16T13:42:24Z
dc.date.issued 2012-01
dc.identifier.issn 2340-5031
dc.identifier.uri http://hdl.handle.net/10016/13886
dc.description.abstract Workers in less secure jobs are often paid less than identical-looking workers in more secure jobs. We show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical, and firms differ, but do so only in offered job security (the probability that the worker is not sent into unemployment). In a setting where workers search on and off the job, wages paid increase with job security for at least all firms in the risky tail of the distribution of firm-level unemployment risk. As a result, unemployment spells become persistent for low-wage and unemployed workers, a seeming pattern of ‘unemployment scarring’, that is created entirely by firm heterogeneity alone. Higher in the wage distribution, workers can take wage cuts to move to more stable employment.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries UC3M Working papers. Economics
dc.relation.ispartofseries 12-09
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other Layoff rates
dc.subject.other Unemployment risk
dc.subject.other Wage differentials
dc.subject.other Unemployment scarring
dc.title Unemployment risk and wage differentials
dc.type workingPaper
dc.subject.jel J31
dc.subject.jel J63
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
dc.type.version submitedVersion
dc.identifier.uxxi DT/0000000854
dc.identifier.repec we1209
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