Universität zu Köln

Essays on Individual Labor Income Dynamics

Busch, Christopher (2017) Essays on Individual Labor Income Dynamics. PhD thesis, Universität zu Köln.

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    Abstract

    Chapter 2 documents in administrative German social security data that the extent of occupational switching upon changing jobs is high, and that the decision to change occupations is of major relevance for realized wage changes. It develops a structural model in which workers optimally choose occupations in response to productivity shocks. The model is used to identify the role of occupational switching choices for productivity changes, and to quantify the utility gain from the option of occupational switching. Chapter 3 develops a novel Generalized Method of Moments estimation approach for the relationship between idiosyncratic and aggregate labor income risk. In a decomposition of income changes into transitory and permanent shocks, it shows identification of their variance and skewness. In German survey data, the distribution of permanent shocks to gross earnings of males is more dispersed and more left-skewed in recessions. Households smooth transitory shocks; taxes and transfers further smooth these shocks and remove the cyclicality of permanent shocks. Chapter 4 provides a comparative analysis of the United States, Germany, and Sweden. Using non-parametric methods, it documents that–in all three economies–downside risk is higher in recessions and the existing tax and transfer schedules are successful at reducing this cyclicality. The chapter finishes with an evaluation of the welfare gain coming from the insurance provided by the government on top of within-household insurance using an incomplete markets model with partial insurance against income fluctuations. Chapter 5 sets up a real business cycle model with two production sectors and involuntary unemployment. Aggregate fluctuations are endogenously propagated asymmetrically to the two sectors. As a consequence, workers want to move across sectors in response to aggregate shocks, which is costly. These costs can generate costs of aggregate fluctuations, which exceed those in a frictionless economy.

    Item Type: Thesis (PhD thesis)
    Creators:
    CreatorsEmail
    Busch, Christopherbuschchris86@gmail.com
    URN: urn:nbn:de:hbz:38-74612
    Subjects: Economics
    Uncontrolled Keywords:
    KeywordsLanguage
    Occupational Choice; Sectoral Mobility; Human Capital; Wage Dynamics; Labor Income Risk; Business Cycle; Skewness; Social Insurance PolicyUNSPECIFIED
    Faculty: Wirtschafts- u. Sozialwissenschaftliche Fakultät
    Divisions: Wirtschafts- u. Sozialwissenschaftliche Fakultät
    Language: English
    Date: 13 March 2017
    Date Type: Publication
    Date of oral exam: 13 March 2017
    Full Text Status: Public
    Date Deposited: 27 Mar 2017 11:26:36
    Referee
    NameAcademic Title
    Krause, MichaelProf. Ph.D.
    Ludwig, AlexanderProf. Dr.
    URI: http://kups.ub.uni-koeln.de/id/eprint/7461

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