Papers Containing Tag(s): 'Longitudinal Employer Household Dynamics'
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Viewing papers 231 through 240 of 246
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Working PaperThe 1990 Decennial Employer-Employee Dataset
October 2002
Working Paper Number:
CES-02-23
We describe the construction and assessment of a new matched employer-employee data set, the 1990 Decennial Employer-Employee Dataset (1990 DEED). By using place of work name and address, we link workers from the 1990 Long Form Sample to their place of work in the 1990 Standard Statistical Establishment List. The resulting data set is much larger and more representative across regional and industry dimensions than previous matched data sets for the United States. The known strengths and limitations of the data set are discussed in detail.View Full Paper PDF
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Working PaperAgent Heterogeneity and Learning: An Application to Labor Markets
October 2002
Working Paper Number:
tp-2002-20
I develop a matching model with heterogeneous workers, rms, and worker-firm matches, and apply it to longitudinal linked data on employers and employees. Workers vary in their marginal product when employed and their value of leisure when unemployed. Firms vary in their marginal product and cost of maintaining a vacancy. The marginal product of a worker-firm match also depends on a match-specific interaction between worker and rm that I call match quality. Agents have complete information about worker and rm heterogeneity, and symmetric but incomplete information about match quality. They learn its value slowly by observing production outcomes. There are two key results. First, under a Nash bargain, the equilibrium wage is linear in a person-specific component, a firm-specific component, and the posterior mean of beliefs about match quality. Second, in each period the separation decision depends only on the posterior mean of beliefs and person and rm characteristics. These results have several implications for an empirical model of earnings with person and rm e ects. The rst implies that residuals within a worker-firm match are a martingale; the second implies the distribution of earnings is truncated. I test predictions from the matching model using data from the Longitudinal Employer-Household Dynamics (LEHD) Program at the US Census Bureau. I present both xed and mixed model specifications of the equilibrium wage function, taking account of structural aspects implied by the learning process. In the most general specification, earnings residuals have a completely unstructured covariance within a worker-firm match. I estimate and test a variety of more parsimonious error structures, including the martingale structure implied by the learning process. I nd considerable support for the matching model in these data.View Full Paper PDF
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Working PaperThe Sensitivity of Economic Statistics to Coding Errors in Personal Identifiers
October 2002
Working Paper Number:
tp-2002-17
In this paper, we describe the sensitivity of small-cell flow statistics to coding errors in the identity of the underlying entities. Specifically, we present results based on a comparison of the U.S. Census Bureau's Quarterly Workforce Indicators (QWI) before and after correcting for such errors in SSN-based identifiers in the underlying individual wage records. The correction used involves a novel application of existing statistical matching techniques. It is found that even a very conservative correction procedure has a sizable impact on the statistics. The average bias ranges from 0.25 percent up to 15 percent for flow statistics, and up to 5 percent for payroll aggregates.View Full Paper PDF
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Working PaperEstimating the Relationship between Employer-Provided Health Insurance, Worker Mobility, and Wages
September 2002
Working Paper Number:
tp-2002-23
In this paper, a joint model of wages, hazard of a job ending, and probability of holding employer-provided health insurance is estimated, taking account of unobservable person and job characteristics. A unique data source, the 1990 and 1996 SIPP Panels linked to SSA administrative job histories, enables the identification of random person and job effects and the correlation of these effects across the three equations. The explicit modeling of this correlation produces consistent estimates of the effect of tenure on wages and the effect of health insurance on mobility. Substantial levels of job-lock and significant annual returns to seniority are found. Increasing the job-specific probability of obtaining employerprovided health insurance from 60% to 63%, or increasing the job-specific hourly wage rate by $.80, are both associated with an equivalent decrease in the hazard of the job ending. However, the dollar value of the wage benefit is substantially higher.View Full Paper PDF
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Working PaperThe interactions of workers and firms in the low-wage labor market
August 2002
Working Paper Number:
tp-2002-12
This paper presents an analysis of workers who persistently have low earnings in the labor market over a period of three or more years. Some of these workers manage to escape from this low-earning status over subsequent years, while many do not. Using data from the Longitudinal Employer Household Dynamics (LEHD) project at the U.S. Census Bureau, we analyze the characteristics of persons and especially of their firms and jobs that enable some to improve their earnings status over time.View Full Paper PDF
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Working PaperAbandoning the Sinking Ship: The Composition of Worker Flows Prior to Displacement
August 2002
Working Paper Number:
tp-2002-11
declines experienced by workers several years before displacement occurs. Little attention, however, has been paid to other changes in compensation and employment in firms prior to the actual displacement event. This paper examines changes in the composition of job and worker flows before displacement, and compares the "quality" distribution of workers leaving distressed firms to that of all movers in general. More specifically, we exploit a unique dataset that contains observations on all workers over an extended period of time in a number of US states, combined with survey data, to decompose different jobflow statistics according to skill group and number of periods before displacement. Furthermore, we use quantile regression techniques to analyze changes in the skill profile of workers leaving distressed firms. Throughout the paper, our measure for worker skill is derived from person fixed effects estimated using the wage regression techniques pioneered by Abowd, Kramarz, and Margolis (1999) in conjunction with the standard specification for displaced worker studies (Jacobson, LaLonde, and Sullivan 1993). We find that there are significant changes to all measures of job and worker flows prior to displacement. In particular, churning rates increase for all skill groups, but retention rates drop for high-skilled workers. The quantile regressions reveal a right-shift in the distribution of worker quality at the time of displacement as compared to average firm exit flows. In the periods prior to displacement, the patterns are consistent with both discouraged high-skilled workers leaving the firm, and management actions to layoff low-skilled workers.View Full Paper PDF
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Working PaperThe Creation of the Employment Dynamics Estimates
July 2002
Working Paper Number:
tp-2002-13
View Full Paper PDF
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Working PaperIs it Who You Are, Where You Work, or With Whom You Work? Reassessing the Relationship Between Skill Segregation and Wage Inequality
June 2002
Working Paper Number:
tp-2002-10
In a recent paper, Kremer & Maskin (QJE, forthcoming) develop an assignment model in which increases in the dispersion and mean of the skill distribution can lead simultaneously to increases in wage inequality and skill segregation. They then present evidence that, concurrent with rising wage inequality, wage segregation increased for production workers in the United States between 1975 and 1986. My paper argues that relying on wages as a proxy for skill may be problematic. Using a newly developed longitudinal dataset linking virtually the entire universe of workers in the state of Illinois to their employers, I decompose wages into components due, not only to person and firm heterogeneity, but also to the characteristics of their co-workers. Such "co-worker effects" capture the impact of a weighted sum of the characteristics of all workers in a firm on each individual employee's wage. While rising wage segregation can result from greater skill segregation, it may also be due to changes in the variance of co-worker effects in the economy, or to changes in the covariance between the person, firm, and co-worker components of wages. Due to the limited availability of demographic information on workers, I rely on the person specific component of wages to proxy for co-worker "skills." Because these person effects are unknown ex ante, I implement an iterative estimation approach where they are first obtained from a preliminary regression that excludes any role for co-workers. Because virtually all person and firm effects are identified, the approach yields consistent estimates of the co-worker parameters. My estimates imply that a one standard deviation increase in both a firm's average person effect and experience level is associated, on average, with wage increases of 3% to 5%. Firms that increase the wage premia they pay workers appear to do so in conjunction with upgrading worker quality. Interestingly, the average effect masks considerable variation in the relative importance of co-workers across industries. After allowing the co-worker parameters to vary across 2 digit industries, I find that industry average co-worker effects explain 26% of observed inter-industry wage differentials. Finally, I decompose the overall distribution of wages into components due to persons, firms, and coworkers. While co-worker effects do indeed serve to exacerbate wage inequality, the tendency for high and low skilled workers to sort non-randomly into firms plays a considerably more prominent role.View Full Paper PDF
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Working PaperModeling Labor Markets with Heterogeneous Agents and Matches
May 2002
Working Paper Number:
tp-2002-19
I present a matching model with heterogeneous workers, firms, and worker-fim matches. The model generalizes the seminal Jovanovic (1979) model to the case of heterogeneous agents. The equilibrium wage is linear in a person-specific component, a firm-specific component, and a match specific component that varies with tenure. Under certain conditions, the equilibrium wage takes a simpler structure where the match specific component does not vary with tenure. I discuss fixed- and mixedeffect methods for estimating wage models with this structure on longitudinal linked employer-employee data. The fixed effect specification relies on restrictive identification conditions, but is feasible for very large databases. The mixed model requires less restrictive identification conditions, but is feasible only on relatively small databases. Both the fixed and mixed models generate empirical person, firm, and match effects with characteristics that are consistent with predictions from the matching model; the mixed model moreso than the fixed model. Shortcomings of the fixed model appear to be artifacts of the identification conditions.View Full Paper PDF
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Working PaperThe Measurement of Human Capital in the U.S. Economy
April 2002
Working Paper Number:
tp-2002-09
We develop a new approach to measuring human capital that permits the distinction of both observable and unobservable dimensions of skill by associating human capital with the portable part of an individual's wage rate. Using new large-scale, integrated employer-employee data containing information on 68 million individuals and 3.6 million firms, we explain a very large proportion (84%) of the total variation in wages rates and attribute substantial variation to both individual and employer heterogeneity. While the wage distribution remained largely unchanged between 1992-1997, we document a pronounced right shift in the overall distribution of human capital. Most workers entering our sample, while less experienced, were otherwise more highly skilled, a difference which can be attributed almost exclusively to unobservables. Nevertheless, compared to exiters and continuers, entrants exhibited a greater tendency to match to firms paying below average internal wages. Firms reduced employment shares of low skilled workers and increased employment shares of high skilled workers in virtually every industry. Our results strongly suggest that the distribution of human capital will continue to shift to the right, implying a continuing up-skilling of the employed labor force.View Full Paper PDF
