Webinar: Job Stability, Earnings Dynamics, and Life Cycle Savings

Moritz Kuhn works on wealth and income inequality. He has published in Journal of Political Economy, American Economic Review, an Journal of European Economic Association, among others.

Some information and suggestions:

• If you want to attend this online seminar, you need to register here. You will then be sent by email the details of the zoom session.
• Your microphone will be on mute upon joining the meeting, please leave it like that and unmute it only if you want to ask a question.
• Asking questions: please just go ahead and ask questions in the “usual way” (ie, don’t use the chat unless you want to notify me/host of any problem related to seminar.
• Please use the registration form to register for a Zoom bilateral on Monday.
• Please request a bilateral before Thursday 10 September, 09h00

Abstract

Labor markets are characterized by large heterogeneity in job stability. Some workers hold lifetime jobs while others circle repeatedly in and out of employment. We explore the economic consequences of such heterogeneity by making two independent contributions. First, using Survey of Consumer Finances (SCF) data, we document a systematic positive relationship between job stability and wealth accumulation. Per dollar of income, workers with more stable careers hold more wealth. Second, we develop a life-cycle consumption-saving model with heterogeneity in job stability and endogenous earnings dynamics and document that the model is jointly consistent with empirical labor market mobility, earnings, consumption, and wealth dynamics over the life cycle. Using the model, we explore the consequences of heterogeneity in job stability at the microeconomic and macroeconomic level. At the micro level, we explore the consequences of early career job instability. We find that unstable jobs at age 25 leave long-lasting scars of up to 10% on earnings and consumption up to 25 years later. At the macro level, we find welfare gains of 1.6% of consumption for labor market entrants from what has been referred to as the secular decline of U.S. labor market dynamism.