Poster Paper:
Job Separation Post and Pre Great Recession in the US: Evidence from the Survey of Income and Program Participation
*Names in bold indicate Presenter
Using tools from the selection literature and duration analysis, the proposed approach
helps identify both one’s selection into employment and his tenure through: (1) the
competing risks model, which helps identify how duration dependence (pure and unobserved
heterogeneity) affects labor market transitions; and (2) stock and flow samples,
which provide an intuitive set-up to compare short and long termed tenured workers.
By utilizing these tools to account for tenure selectivity, one is able to make better
predictions compared with models which only account for selection into employment.
I find that longer tenure yields higher wages that can be explained by higher mobility
costs or firm specific human capital; whereas, individuals with shorter tenure have
lower wages and a higher propensity to separate. Such empirical findings are consistent
with the research conducted by Becker [1962] and Jovanovic [1979]. Additionally, this
paper argues that methods that ignore the presence of flow and stock samples data
result in wrong predictions for individuals experiencing short tenure or unemployment
spells.
