Johan Sæverud forsvarer sin ph.d.-afhandling

Johan Sæverud forsvarer sin ph.d.-afhandling: The Danish Labor Market Four empirical examinations".

Ph.d.-forsvaret foregår i CSS 26.2.21. Link til at deltage on-line: https://ucph-ku.zoom.us/j/61347378204?, kode: 1234 

En elektronisk kopi af afhandlingen kan fås ved henvendelse til: charlotte.jespersen@econ.ku.dk

Bedømmelsesudvalg

• Lektor Torben Heien Nielsen , Økonomisk Institut, Københavns Universitet, Danmark (formand)
• Professor Paul Bingley, VIVE, DK
• Professor Adeline Delavande, University of Technology Sydney, Australia

Abstract

This thesis consists of four self-contained research papers, all related to the Danish labor market. All four papers leverage the extensive Danish administrative data, and two of the papers use purpose-designed surveys. The chapters can be read independently and each chapter contains references and appendices.

Chapter 1: Communicating Social Security Reform.

The first chapter, co-authored with Andrew Caplin, Eungik Lee, and Søren Leth-Petersen, investigates how a Danish social security reform in 2006 has been internalized by the public. The reform changed statutory social security eligibility age from a fixed value, to depend on life expectancy and it varies for different cohorts. Based on survey answers, we elicit subjective distributions of individual beliefs on social security eligibility age, and test whether a simple information treatment changes people's beliefs.

We find that younger cohorts are more uncertain and have beliefs that are, on average, further from the statutory eligibility age. We also find that people who get the treatment move closer to the statutory eligibility age in beliefs, but for younger cohorts there is still a significant gap. The age at which people plan to retire is also affected by the treatment. The uncertainty is not affected by the information treatment. Finally, we build a theoretical model that rationalizes the updating of beliefs.

Chapter 2: How does Divorce Affect Adult Labor Market Outcomes of Children?

In the second chapter, I document how the correlation between a divorce and adverse labor market for the children is probably driven entirely by selection effects, meaning that parents who are more likely to divorce are also more likely to have children who for example earn less as adults.

I use a sibling fixed effects approach to control for unobserved family heterogeneity, by comparing the outcomes of siblings within a family. The siblings are treated differentially by the divorce and this variation identifies the causal effect. I find no effect across a range of different labor market outcomes measured at age 32.

Chapter 3: Worker Productivity from Tenure and Experience: Measurement from the Firm Perspective.

In the third chapter, co-authored with Andrew Caplin, Minjoon Lee, Søren Leth-Petersen, and Matthew D. Shapiro, we directly measure how worker productivity is affected by tenure and experience by using a survey with hypothetical questions to firm managers. We find significant heterogeneity in the amount of tenure needed to reach the full productivity, suggesting that empirical works that aim to estimate returns to tenure and experience should allow for variation in returns across jobs. 

In the survey we also directly elicit wage returns to tenure and experience (results in line with the literature), and we construct a model that estimates productivity returns to tenure and experience, showing that they differ from the wage returns.

Chapter 4: Inequality and Dynamics of Earnings and Disposable Income in Denmark 1987-2016.

The fourth chapter, which is co-authored with Søren Leth-Petersen, documents how earnings inequality has changed over time, both in terms of the level of earned income and the growth rates. We show that growth rates for earned income has pro-cyclical skewness and considerable pro-cyclical kurtosis, meaning people face more negative and larger shocks during recessions. On top of the cyclicality, the income shocks are heterogeneous across ages and income levels. These facts are important for modelling income processes, where shocks are often modelled using only the second moment and disregarding heterogeneity.

We argue that disposable income is a more relevant measure, as it reflects consumption opportunity, and conduct the same analysis using disposable income. For this measure, skewness and kurtosis are at a low level, they are not varying across the business cycle, and they display very little heterogeneity. Our results show that higher order moments are less important when characterizing the stochastic properties of disposable income growth in contrast to earnings growth.

This chapter is part of the Global Repository of Income Dynamics project, read more here: https://mebdi.org/global-repository-income-dynamics.