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Do Wages Compensate for Risk of Unemployment? Parametric and Semiparametric Evidence from Seasonal Jobs

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TLDR
In this article, the authors estimate compensating differentials for risk of unemployment and compare those with unemployment insurance benefits provided by the government, finding that there exists a positive compensating differential of 15.5% of the average wage, which corresponds to an implicit replacement rate significantly larger than the typical unemployment benefit.
Abstract
Due to unique institutional and technological factors, seasonal agricultural jobs are characterized by much higher risk of unemployment than similar permanent jobs. I estimate compensating differentials for risk of unemployment and compare those with unemployment insurance benefits provided by the government. I use two sets of estimators. First, I calculate parametric estimates with Heckman correction. Second, I compute three versions of a distribution-free semiparametric estimator which is robust to misspecification of the residual distribution. The main finding of the paper is that there exists a positive compensating differential of 15.5% of the average wage. This corresponds to an implicit replacement rate significantly larger than the typical unemployment benefit.

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The executive turnover risk premium

TL;DR: This paper found that turnover risk is significantly positively associated with compensation and that job-risk-compensating wage differentials arise naturally in competitive labor markets, and they rejected an entrenchment model according to which powerful CEOs have lower job risk and at the same time secure higher compensation.
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The implicit wage costs of family friendly work practices

TL;DR: This article found that workers overstate their access to family-friendly practices, and that the provision of family friendly practices is costly to firms and valuable to workers, and they anticipate the emergence of a hedonic equilibrium in which workers provided with such practices face an implicit reduction in their earnings.
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Flexible contracts and subjective well‐being

TL;DR: This article found that flexible contracts are a strong negative determinant of satisfaction with job security but are often a positive determinant on other dimensions of job satisfaction, as a consequence, flexible contracts have either a weak negative influence or no influence on overall job satisfaction.
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Flexible Contract Workers in Inferior Jobs: Reappraising the Evidence

TL;DR: In this paper, the authors seek to jointly evaluate objective and subjective elements of flexible employment contracts, and develop and use an index of job quality that incorporates both subjective and objective elements.
Posted Content

Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria

TL;DR: This article investigated the existence of compensating wage differentials across seasonal and non-seasonal jobs, which arise due to anticipated working time restrictions and found that employers pay on average a positive wage differential of about 11% for seasonal jobs and that the unemployment insurance system contributes a similar amount.
References
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Employer Learning and Statistical Discrimination

TL;DR: In this paper, the authors provide a test for statistical discrimination or rational stereotyping in environments in which agents learn over time, and they also examine the empirical implications of statistical discrimination on the basis of race.
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Semiparametric estimation of censored selection models with a nonparametric selection mechanism

TL;DR: In this paper, an estimator for the coefficients in a single-index selectivity bias model is considered under the assumption that the selection correction function depends on the conditional mean of some observable "selection" variable.
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Non-parametric analysis of a generalized regression model: the maximum rank correlation estimator

TL;DR: The paper considers estimation of a model yi = D · F(x′iβ0, ui), and proposes the maximum rank correlation estimator which is non-parametric in the functional form of D·F and non- parameters in the distribution of the error terms, uu.
Journal ArticleDOI

Distribution-free maximum likelihood estimator of the binary choice model1

Stephen R. Cosslett
- 01 May 1983 - 
TL;DR: In this paper, a method for estimating the parameters 9 without assuming any functional form for the distribution function F is presented, and it is shown that this estimator is consistent and that F is also consistently estimated.
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What jobs can you get with an agricultural degree?

Due to unique institutional and technological factors, seasonal agricultural jobs are characterized by much higher risk of unemployment than similar permanent jobs.