Inter-industry wage differentials revisited: Wage volatility and the option value of mobility

• 成果类型: Article
• 署名作者: Neumuller, Seth
• 署名单位: Wellesley College
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2015.08.001
• 发表日期: 2015
• 页码: 38-54
• 关键词: Inter-industry wage differentials; wage volatility; option value; mobility

摘要

Analysis of data from the PSID reveals that idiosyncratic wage volatility varies inversely with inter-industry wage differentials and is positively correlated with both returns to industry tenure and rates of inter-industry mobility. An incomplete markets life cycle model in which inter-industry mobility decisions and wage differentials are endogenously determined in equilibrium is then developed and shown to be capable of rationalizing these features of the data. In the model, the ability of worker to switch industries generates option value that is large enough to offset the standard risk premium that workers demand for exposure to excess wage volatility. (C) 2015 Elsevier B.V. All rights reserved.