Compensating Wage Differentials and the Duration of Wage Loss / Daniel S. Hamermesh, John R. Wolfe.

Format:

Book

Author/Creator:

Hamermesh, Daniel S.

Contributor:

National Bureau of Economic Research.

Wolfe, John R.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1887.

NBER working paper series no. w1887

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1986.

Summary:

Several reasons are offered why workers will receive larger compensating wage differentials for increases in the duration of wage losses than for increases in the probability of loss that produce the same expected loss. A formal model of occupational choice is developed that shows the extent to which the compensation for increased duration exceeds that for increased risk. Using Panel Study of Income Dynamics data linked to industry data on injuries and unemployment, we find:1) Nearly all the compensating wage differential for losses due to workplace injuries is compensation for increases in the duration of loss; 2) Similarly, nearly all the compensation for losses due to cyclical unemployment is compensation for increases in duration, especially for increases in duration beyond the 26 weeks of unemployment that are usually compensated by unemployment insurance. The compensating differentials for risk of injury are larger for union than for nonunion workers, while those for cyclical unemployment are smaller for union workers.

Notes:

Print version record

April 1986.