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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)