Continuation of NLS Discussion Paper 96-33
Part 2 of 2
This version of the paper was split for web delivery.
Table 1
Defiition
of V=iables
Vmiable
Definition
Msu
C~rent
hwage
Log Of Red
Employer
Offers Health hiwmce
Howly
Wage Rate
exp wim
Yems of Employment
Experience
eWwsqr
Yems of Employment
Eqerience
Wade
Wlghest Grade Completed
rmemate
State Un-ployment
ti-pet
% .of Persons in R’s State Coverd
by Private
pet-d
% Cbge
Between
Mosp
Log Red
~te
k Covaage
Ave.
Proportion
D&ly Hospital
% Change h Hospitrd Room
Away Rom
At Lewt
Work At L=st
One Ctid
Sqwed
Living
leave
Left Job Betwem
hterviews
sephv
Fired, Dismissed,
or Layed
sep -qtit
Qtit
Room
Charge Betwwn
Off from
age
b
Equals One E Respondent
is Mde
-ried
Equds
is M~l?!
as of May 1 in Ea&
53
in R’s State
Yeas
At Home
mde
One ff Respondent
Ye=s
1 Week For mess
Job for New Job or for Personal
Yems,
Chmge
~
Suvey
Job
R-sons
Y-.
_. _.._
Table 2
Descriptive Statistics
Vwiable
Mean
Std.
Dev.
binsw
0.804
0.397
kwage
1.936
0.446
experien
7.696
3.209
13.121
2.172
2.920
1.045
hi.pet
0.775
0.059
pet-&
-0.001
0.038
MOsp
5.410
0.334
pctdghp
0.093
0.079
fispeU
0.032
0.176
&ld
0.339
0.474
leave
0.284
0.451
sepinv
0.068
0.252
sep-qtit
0.179
0.384
26.237
3.229
de
0.579
0.494
mmried
0.477
0.499
grade
uemat
e
age
Note%
1) Observations me pooled acre2) N = 24325
54
yeas md wci&ted.
–
‘“
‘
..
Sample of Respondents
Table 3
Selected from the 1979-1992
Descriptimr
Was h the 1979 NLSY
W=
Selection
Rule
respondent
saple.
a NLSY cross-sectirrn
btaviewed
Mb
at l-t
xtivity
‘k-ping
dmhg
8 times dtm
of Ohs.
the age of 21.
=
intmview
e~erience,
health instiace,
Did not report btig
Ftid
employed
at d
smnple conttins
consecutive
3630
12686
6575
6111
1156
4955
1040
3915
199
3716
57
3659
24
3635
at two or more comecntive
kterviews.
W=
o
for wages, employment
or job mobtity.
‘disabled’
Stie
mr interview
6 times.
in any y=
Sample
was
once.
the week preceding
Had no missing Wo-tion
Record
Deleted
rearhing
the week prece&g
h the labor force cluing
#
respondent.
house’ no more th
at Ie=t
of
NLSY
interviews
respondents
..5.
and 25174
55
total
obserntions
3630
from 197%1992.
Table 4
Health hsurance
(HI) and Job ~=sitions
Between Consecutive
and t + 1, By Type of Job ~tisition
Obserwtions
at Tries
t
Weighted CeU Percentages
[Weighted Colm
Percentages]
(Uiw&&ted
CeU frequencies)
Period
t+l
Job
Health
w/o
w/
w/o
w/
w/o
w/
HI,
HI,
HI,
HI,
HI,
HI,
Insurance
Not
Not
Not
At
At
Not
Status,
Same
Same
At
At
Same
Same
At Same
At
Same
Job
Job
Job
Job
Same
Job
Status
– Qufi
– Quit
– LFD1
– LFD.
Job
Job
Does
N“ot
Offers
Total
~
HI
2.39
3.00
[12.63]
[3.70]
(637)
(757)
(1394)
3.50
10.31
13.81
[18.54]
[12.72]
(895)
(2489)
Offer
.5.39
(3384)
2.53
1.18
1.35
[6.24]
[1.67]
(337)
(351)
(688)
1.34
3.02
4.36
[7.06]
[3.73]
(353)
(772)
(1125)
7.25
4.20
11.45
[38.35]
[5.17]
(1812)
(1057)
(2869)
3.25
59.21
62.46
[17.18]
[73.02]
(832)
(14061)
18.91
htal
Job
81.0.9..
[100.0]
[100.0]
(4866)
(19487)
“(14893)
100.0
(24353)
..
(1) LFD = Layed off, Fked, or Disfised
56
Probabfity
of a Truitim
Period t + 1 Job that Do=
Table 5a
Prom a Period t Job tbt Doesn’t Offer Health bsurmce
to a
Offer Health hsmmce
Covwage, by Type of Job Trmsition
md
by State Hdth
hsurance
Avtiablhty
Quit
Involuntary
Job
Separation
Old
State
HI Coverage
QumtfiMin
Stay
Old
At
Job
-tes:
(% Covered)
(54%)
.616
.486
.372
.540
.345
1st (72%)
.618
2nd
(77%)
.618
,.555
.337
3rd
(81%)
.618
.567
.331
.619
.594
.318
M-
(90%)
Note: Pre&ctd
probabfiti=
cdcdatd
mkg
esttit=
~ble
from table 8a.
5b
Probabfity
of a Tr=sitim
Prom a P=iod t Job that Doesn’t Off= Hdth
hsurace
to a
Period t + 1 Job tkt Does Offm Health bswace
Coverage, by Type of Job Transition and
by hud
Percentage Ch~e
k State Hdth
ksurmce
Cov=age
Q&t
Old
% Change
Qumtfies
Involuntmy
Job
Separating
Stay
Old
At
Job
In tite:
(% Chmge)
1st (-2.61%)
.557
.431
2nd
(.20%)
.564
.461
3rd
(2.31%)
.570
.484
Note: Predicted prob&fiti-
cd~ted
mhg
57
estfit=
from table 8a.
.225
_.246
.263
Table 5C
Probabihty
of a fi=sition
from a Period t Job that Do~n’t
Offw Health ksurmce
Period t + 1 Job that Does Offer Health ksurance
“Coverage, by Type of Tob fiasitim
by State Health Cme Prices
Quit
Old
State
Hospital
Omrtiles
Min
1st
(4.98)
Max
Stay
ion
Old
At
Job
Prices:
2nd (5.26)
-
Sepmat
(k Price)
(4.09)
3rd
Involuntary
Job
to a
ad
(5.53)
.738
.723
.18~
.658
.606
;276
.630
.565
.312
.524
.349
...6.01..
(6.41)
.508
Note Pre&cted probabflitiw
cddated
... .477
.394. .
ustig =timates
from fiable 8a.
Table 5d
Probability
of a ~ansition
from a Period t Job that Doesn’t Offer Health ksur=ceto
Period t + 1 Job that Does Offm Health hsmance
Coverage, by Type of Job Tr~sitiin
by Amual Percentage Change h State Health C=e Prices
a
tid
,–
Old
YO Change
Quit
Involuntary
Job
Separation
Stay
Old
At
Job
In Price:
Qumtiles” ( %)
.
,.
1st (5.95%)
.620”
.555
.337
2nd
(9.78%)
.617
.551
.336
3rd
(13.40%)
.615
.548
.335
Notti Predicted probabfities
calmlated
ustig esttiates
58
from table 8a.
--
“’
!
....$
Pwiod
Table 6a
Pmbabihty
of a ~=sition
nom a Pwiod t Job that Offers Health hsm~ce
to a
t + 1 Job that Do= Not Offm Health hsurace
Coverage, by Type of Job ~msition
by State Health ksumce
Avtilabifity
Quit
Old
State
HI Coverage
Qumtiles
Mb
~y
Stay
Separation
Old
At
Job
fites:
(% Covered)
(54%)
.344
.289
.113
1st (72%)
.264
.314
.078
2nd
(77%)
.245
.321
.071
3rd
(81%)
.230
.326
.065
.197
.340
.053
Mm
(90%)
Note: Predicted probabfiti~
Period
Involunt
Job
md
calctited
mkg esthates
from table 8b,
Table 6b
ProbablEty of a ~ansition
Rom a Period t Job that Offers Health ksurace
to a
t + 1 Job that Does Not Offer Health hsmance
Coverage, by Type of Job ~msitim
by Amud
Percentage Ch=ge
k State Health bsu=ce
.Coverage
Quit
Old
% Change
Qu~tiles
InvOlunt~
Job
Stay
Separation
Old
ad
At
Job
In fite:
(% Change)
1st (-2.61%)
.245
.329
2nd
(.20%)
.246
.321
.069
3rd
(2.31%)
,247
.315
.066.
Note: Predicted probabiiti~
cdcdated
nstig estbtes
59
“.
from table 8b.
.074
..—
.,,
.,
Table 6C
Period
Probability
of a fiasition
fiorn a Period t Job that OffWs Health hsurmce
to a
t + 1 Job that Does Not Offw “Hidth hsurace
Coverage, by Type of Job ~=sition
by State Health Cme Prices
Quit
Old
Stite
Hospital
Quatiil=
Separation
Job
Stay
Old
At
Job
Prices:
(h Price)
.175
.325
.012
1st (4.98)
.223
.325
.038
2nd
(5.26)
.240
.325
.053
3rd
(5.53)
.257
.325
.074
.317
.325
.198
Min
M=
(4.09)
(6.41)
Note: Predicted probabtiti=
Period
Involuntmy
cddated
“stig esttites
fibm table 8b.
Table 6d
Probability
of a ~=sition
from a Pwiod t Job that Offers Hdth
ksurace
to a
t + 1 Job that Do= Not OffW H-lth
hsurmce
Covwage, by Type of Job ~asition
by Amud
Percentage Change h State Health Care Pricw
Old
% Change
Quartiles
md
Quit
Involuntary
Job
Separation
Stay
Old
At
Job
In Price:
(%)
1st (5.95%)
.243
.319.
.067
2nd
(9.78%)
.246
.321
.070
3rd
(13.40%)
.249
.323
.073
Note: Pre&cted probabfities
.dcdated
ustig esttites
60
from table 8b.
and
Dete~
Table 7
ts of Red
bg
Wages
Coefficient
qerien
e~ersqr
t–Statistic
.056
17.90
-.001
-6.06
wade
.061
54.80
w-ate
-.032
-12.96
.840
39.89
constat
Notes:
(1) R’=
.413, N = 29015
(2) Depmdcnt
miable
b natural Iogtitk
of the homly wage rate h 1983 doUm.
Table 8a
Mtitinotid
Logit Esttiates
of Health hsurance
Coverage md Job Mobiity
Hmmd
tiction
- hdividuals
Observed At Time t At Jobs Not Offering
Health hsur~ce
Coverage]
~=sition
[H(t + 1) =o,T(t)
hdependent
= 1]
-.152
WP ersqr
.001
0.30
-2.00
hi-pet
-2.284
-2.59
pet -ch
.144
0.12
mosp
.572
3.30
-.822
-1.30
-.146
-2.99
Wspeu
.662
3.00
kwage
-.453
-3.94
e
c~nstmt
.305
0.27
experim
-.112
-1.84
exp ersqr
.003
0.67
grade
.089
4.35
hi-pet
-2.234
-2.89
pet -ch
.004
0.00
tiosp
.134
0.86
-1.093
-1.97
-.158
-3.63
i~spe~
.561
.2.70
hwage
-.448
-4.49
Constmt
1.047
1.07
=p erim
-.298
-3.50
mewate
= 2]
-2.21
-.046
p ct &ghp
[H(t + 1) = o,T(t)
z-Statistic
grade
memat
=1]
Coefficient
=P erim
p ct chghp
[H(t + 1) = I,T(t)
Vmiable
exp ersqr
.006
0.95
grade
-.076
-2.60
M-pet
-3.993
-3.55
pet -h
-.840
-0.56
Mosp
.860
4.00
pet chghp
memat
-.405
e
.-
-0.50
-.016
-0.28
flspeU
.632
2.28
bwage
.051
0.35
-.786
-0.56
constmt
62
_~
.
.
Mdtinofid
LOgit Esthtw
fiction
- hdivid~s
Observed
Table 8a (continued)
of Health bsu=ce
Coverage md Job Mobfity H~md
At Tme t At Jobs Not Offering
Health bsmmce
Coveragei
~msition
hdependent
[H(t + 1) = l,T(t)
[H(t + 1) = l,T(t)
= 2]
= 3]
V=iable
Co-cient
z-Statistic
exp erien
.-.098
-1.14
e~ersqr
-.000
-0.07
grade
.035
1.24
ti.pet
-2.700
-2.49
pet .&
.982
0.65
MOsp
.253
1.17
pct~ghp
-.742
-0.96
memate
-.067
-1.13
iUpeU
.669
2.48
kwage
.075
0.54
constant
-.570
-0.42
exp erim
-.142
-2.36
exp wsqr
.011
2.95
grade
.093
4.43
hi-pet
-.572
-0.74
pet -d
3.191
2.5?
Mosp
.593
3.69
-.095
-0.18
pct&ghp
unemate
.024
0.55
WspeU
-.280
-1.01
hwage
.060
0.60
-4.546
-4.42
const mt
Note,:
(1) At the of titial
observation (t~.
does not offer health hsmmce
(2) h colum
t) ea& tidividual
at a job whi~
coverage.
1 H(t + 1) represents health &sum..
observation, ad
b wortig
statw h the y.=
fo~owtig the titid
T(t) represents the job transition that took place betwm” the two obsermtiom.
T(t) = 1 represents a job qtit; T(t) = 2 represents an tivolmtary
job aep~ati~
represmts no job &ange.
(3) For identification the category [H(t + 1) = O,T(t) = 3] b excluded.
(4) Pseudo R2 = ,027, N = 4623
63
md T(t) = 3
Table 8b
Mdtinofid
Logit Est&tes
of Health hsurmce
Coverage
&ction
- kdividuds
Observed At Time t At Jobs Offering
md Job Mobfity
Hdth
hsmmce
Hazmd
Covwagel
—
~msition
[H(t + 1) = o, T(t)
hdependent
= 1]
-2.18
exp wsqr
.000
0.02
grade
-.063
-3.20
hi-pet
-2.477
-3.72
-.425
-0.43
MOsp
.673
4.98
pctchghp
.559
1.10
memate
-.154
-3.92
iUspeU
1.073
6.71
-1.229
-11.87
constmt
-..241
=perien
.006
expersqr
-.006
:0.16
-2.73
.092
8.36
M-pet
-.211
-0.53
pet -ch
-.481
-0.79
MOsp
.279
3.38
p ct chghp
.023
0.08
-.218
-8.89
e
~spell
.522
.4.08
hwage
-.851
-13.87
-1.704
-3.32
-.293
-3.84
.009
.1.80
-.245
-8.33
const at
= 2]
-.28
grade
uemat
[H(t + 1) = o,T(t)
z-St atistic
-.125
hwage
=1]
Coefficient
=P erien
pet -&
[H(t + 1) = 1, T(t)
Vmidle
exp erien
~ersqr
wade
hi-pet
-1.445
-1.49
p Ct-*
-2.740
-1.99
mosp
.897
4.69
1.529
2.26
pcttighp
uemate
.057
Lll
iUspell
.829
4.84
bwage
Comtmt
64
-.139
-1.33
-2.481
-2.92
Table 8b (continued)
Mdttiofid
Logit Esthates
of Health hsurmce
Coverage
Mction
- kdividnds
Observed At Time t At Jobs Offering
Basition
hdependent
[H(t + 1) = l,T(t)
[H(t + 1) = O,T(t)
= 2]
= 3]
Vmbble
and Job Mobfity
Health hsumce
Coefficient
Haz~d
COveragel
z-Statistic
exp erim
-.116
-2.00
-persqr
-.002
-0.50
grade
-.154
-7.83
M-pet
-2.015
-3.12
pet -&
-1.301
-1.30
MOsp
.818
6.22
pctchghp
1.123
2.37
memate
-.058
-1.54
~spefl
.829
4.84
hwage
-.139
-1.33
const=t
-2.481
-2.92
=periei
-.234
-4.90
~ersqr
.018
7.06
wade
-..009
-0.52
hi-pet
-2.359
-4.37
pet -ch
-2.402
-2.20
Mosp
1.486
12.67
pet &ghp
1.399
3.12
m-ate
.110
3.35
UspeU
-.226
-0.95
hwage
-.856
-9.69
-7.116
-9.31
constmt
Notes:
(1) At tke
of titial
health kswmce
(2) h colum
obsermtion,
obscrwtion
(time t) ea& indvidud
is woztig
at ~ job which offers
coverage,
1 H(t + 1) represents health kmmce
ad
T(t) represents the job t.msitin
status b the yew fo~owhg the titid
that took pl~e
T(t) = 1 represents a job qtit; T(t) = 2 represents m ~volmtmy
betmem the two obsermtiom.
job sep=atiom
represents
no job &mge.
(3) For idmtficafion
(4) Pseudo R’=
the category [H(t + 1) =1, T(i)=
.046, N = 18690
65
3] is excluded.
and T(t) = 3
Problt
Esttiata
Table 9a
of the Likelihood
(1)
of a Job Change
(4)
(3)
(2)
N~fig~d
=perien
exp ersqr
–.052
–.055
(,028)
(.041)
iUspell
(.041)
(.028)
(.041)
.003
–.002
.003
(.002)
““(.002)
(.002)
(.002)
–.027*
–.029
–.027*
–.032
–.027*
–.029
–.0278
–.031
(.009)
(.075)
(.009)
(.075)
(.009)
(.075)
(.009)
(.075)
.475”
.563*
3.970”
3.168
–.756
2.925
2.926
6.013
(.106)
(.140)
(1.515)
(1.953)
(1.801)
(2”.402)
(2.424)
1.319
–1.227*
1.192
–1.082*
1.327
(.903)
(.326)
[.89”8]
(.331)
(.904)
.758
–.962
.003
–1.100’
1.20
(.331)
(.898)
,741
–1.071”
.795
–1.122”
(.501)
(.729)
(.500]
[.729)
(.508)
(.738)
.346*
–.458*
.342*
–.466*
.339”
– .442
.338*
–.442
(.067)
(.236)
(.067)
(.X3”)
(.068]
[:237)
(.068)
(.237)
.169
–.243
(.243)
(.340)
——
——
–.23.9
.166
–.232
(.340)
(.243)
(.340)
-4.556
–3,387
(1.969)
(2.529)
imp
——
——
——
——
——
——
——
——
–.636
–3.7?
–.722
(.419).,
––
(.421)
––.—
–3.798
--
the s-pie
of respondents rep,esmted
(3) Eight-hu&ed
(4) S_ple
tidvidud
level fied
ti table 3.
effects are not reported.
ticludes 5216 observations.
66
.148
–.579
(.351)
(.475)
1.622
2.222
(L654)
(2.252)
–4.415”
–3.312
(.335)
(.446)
(1.984)
(2,552)
–3.887
-3.252
(3.112)
(4.150)
——
–.601
(.422)
at the 57. level.
based on a subset of 800 respondents randotiy
–.280
(.344)
-.440
(1) Standmd errors h pmentheses.
(2) Probit esttiates
.129.
(.246)
.230
Notw:
sigticance
.906
(.728)
——
- hdicates
(3.281)
(.500)
(.243)
constat
(.028)
.003
.169
imp c
–.055
(.002)
(.326)
c
–.052
(.002)
–1.119*
imp
-.055
–.002
pet -A
mpct
–.052
(.002)
–1.233*
pct&ghp
Fixed
Effects
(.002)
fi-pet
MOsp
(.041)
N~F~c~d
–.002
-.002
grade
(.028)
Fixed
Effects
&awn from
–3.85
--
~_.706
(.424)
–3.940
--
Proht
Esttites
Table 9b
of the Llkefihood of a Job C&ge
kdependent
Vmiable
- MALES
NO Fixed Effects
Fixed Effects
– .072”
experien
expersqr
grade
–.087’
(.027)
(.040)
-.001
.005:
(.002)
(.002)
–.057*
-..055
(.008)
(.078)
.571*
.337*
(.104)
(.136)
–.988=
..925
(.336)
(.921)
–1.748*
–.708
(.508)
(.921)
WspeU
hi-pet
pet-ch
ONLY
..2689
tiosp
pct&ghp
–.608*
(.067)
(.238)
–.058
~,869”
(.234)
(.313)
.072
constmt
–1.61
-—
(.418)
Notes:
. k&cates
(1) Stmdmd
signficmc.e
aors
(2) Probit esttites
the smple
k parentheses.
bwed on a subset of 800 respondents rmdody
of respondents represented m table 3.
(3) Ei@t-hw&ed
(4) Smple
at the 570 level.
ticludes
b&vid+d
level fied
.Kects we not reported.
5275 observation.
67
&am
from
Probit
Esttites
Table 9c
of the L&eEhOOd of a Job Change - FEM~ES
+$~:~dent
NO Fixed Effects
experien
expersqr
Fixed Effects
–.030
-.013
(.027)
(.040)
–.003
.002
(.002)
wade
(.002)
.003
iUspeU
M-pet
pet-fi
MOsp
pctchghp
–.050
(.009)
(.060)
.543*
.536*
(.097)
(.129)
–.505
1.359
(.320)
(.883)
–.181
1.475*
(.497)
(.697)
.174*
–.864*
(.066)
(.226)
.015
constant
ONLY
–.471
(.229)
(.309)
– .770
4.704
(.415)
Not..:
(1) Stand-d
errors b p~entheses,
(2) Probit estimates based on a subset of 800 respondents randotiy
the s-pie
of respondents represented k table 3.
(3) Ei&t-hm&ed
(4) S-PI.
ticl”des
h~vidqal
Icvel fied
effects Z.
5280 observations.
68
not reported.
&a_
from
Probit Estbtes
Table 9d
of the L1keMOOd of a Job Cbmge
kdependmt
Vmiable
- ~~ED
No Freed Meets
qerien
ONLY
Freed Effects
-.054
e~%sqr
-.112”
(.028)
(.042)
–.002
.005*
(.002)
(.002)
-.061
–.047”
grade
(.083)
(.008)
.5059
.500”
Wpm
(.124)
(.093)
.473
-1.325°
bi-pet
(.905)
(.340)
pet-A
mosp
pctfighp
constant
– .959
.?53
(.495)
(.699)
.196”
– .475
(.069)
(.255)
–.157
–.784*
(.255)
(.349)
.453
–1.709
--
(.426)
.,
Note<
“ h&cate*
signficmce
at the 5% level.
(1) Standmd errors h parentheses.
(2) ProbLt esttiates
based on a subset of 8M respondents rmdody
the sample of respondents represented h table 3.
(3) ~ght-hmhed
(4) S_ple
h&tid”al
level &ed
effects me not reported.
ticludes 5336 oher.atiom.
69
&an
from
Probit
Esttiates
Table 9e
of the LikeEhOOd of a Job Change
~~:;fldent
- UNMARHED
NO Fixed Effects
experia
~ersqr
Ftied
ONLY
Effects
–.085
–.069
(.027)
(,042)
–.001
.003
(.002)
(.002)
grade
–.022*
-.207*
(.009)
(.076)
.320*
.180
(.104)
(.138)
M.pet
–1.1488
.726
(.325)
(.934)
pet-&
–1.074
–.124
(.494)
(.726)
.168*
–.601*
(.068)
(.235)
–.081
.–.268
iUspeU
Mosp
pet chghp
(.247)
const at
(.421).
Notes:
‘ kdcates
(1) Stmdmd
(.329)
.381.
signficmce
at the 5% leml
emor, b parentheses.
the sample of respondents represented h table 3.
(3) Eight-hun&ed
tidvidud
level fied
effects ~e not reported.
(4) Sample ticludes s182 ok.rvations.
70
–.968
~
,--
.
.
. . ..
w
.----------
w,
w(l)
---------
-----------------
------
c
-----.---------
..
B
~
----
~A
dl)
pa
P
[0)
.
W(a
------
--------
------------
----------MI
%
B
W2
W(1) .. -----
0
Ml)
‘1 .--------------
w (o):
-------
P
dO)
a
------------
-------[1
92
w,(l) ------
W2[1)
1:
:;
1:
,!
0
P,m)
p{l) p2(1)
71
pJo)
p
*M
.W
I
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1986, Taxation
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Employ=
of khr
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Stith,
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Journal
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Medical Assmiation,
271(1): 64-66.
Don’t
76
68–77.
Let the Nmbers
D. McBride, 1990, Spew Without Health hsur=cDistributions
to POint-in-Time
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of the Utiswed,
Inqui~,
27 (Fd):
Topel, tibert,
1986, Job Mobfity,
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Research in La&r E.otiomics,
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Wind,
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77
md
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of Hmm
8, Pmt A (Grwnwi&,
CT: JAf
the Cmwrs
Of Yomg
Mm,
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hner,
Robert, 1987, Are Trees. .Responsible
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National
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Vm De Ven, Wynad
P.M.~.
and Jacques VW Der Gaag, 1982, Health as = Unobservable:
MMIC-mOdel
of De-d
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national Economic “Review, 21: 529-546.
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nd
bdividud
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hcentives
the Optimal
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A
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COnt~ts,
Vlscusi, Kip, ad W1~a
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md Econodc
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Stephen, and Wei-Jmg Hu-g,
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78
for
School
TO
Economic
(Kdaa-
Appendii
Solution
of the
Let ttie
factor
Semch
be represented
whi~
Matiation
Problemgl
by a sequence
is a fuction
of h.
of &screte
Let c be the out of pocket
z = ti(ti, j) be the instmtmeous
Let the probabihty
A new -ployment
pwiod
off-
h. The probabfity
idomtion,
identictiy
distribution
distributed
Let q(n, h),
of y is tbe
be the &scout
per tit
of time.
that offers wage ti =d
ksu=ce
from
offer of ( w,p)
offers horn
the mmket
given by y, is &awn
at the ad
be F(u).
of every
of y, ~(g),
depends
dependent.
Offers fiom both the market and the
independently
be a probabihty
n, in time interval
Let H(u, n) represent
upon W cwrmtly
of one mother,
atilable
md =e independently
md
h.
distribution
of the nmber
The offer to be mnsidered
of employment
h ead
period
offers
is the best of
i.e.,
the probabfity
that the best of n Offers is less th-
I specify the the density
u given that n ~ 1.
q to be Poisson,
q(n, h) = e ‘Ah (Ah)n / n! ,
whwe
A is the offer =riti
the offer fiom
is continuous
the mket,
md
rate.
u, ad
strictly ticrahg,
cmrent utifity offer Z, ad
tidividud’s
problem
e, The solution h tti
Let
over time.
those that were offered in the period,
As k Mortaen
cost of SWA
of utifity
employ=,
fuction
me ha-
n = 0,1,...,
from the mmket,
fmction
horn the cmrent
distributimr
h. Let ~(h)
utiEty flow of m employment
distribution
so that the expectation
cmrent employer
of length
ut ifity flow from a cmrent job
price P. Let u = U(W, p) be the imt=t=eous
the uket.
periods
Let VG(U)
wortig
=d
denote
forever
VG(0)
(23)
the value of &scontkting
at the s-e
levd
= O by assmption.
wction k daptd
Vs,
accepting
of compensation.
Vs(ti)
Vs (g ) is the value of the new offer from the cuent
is to ~ze
se=ch,
VG(U)
is the value of the
employer.
Then the
where Vs solves:
from Mortentsm
that text.
79
(1986).
A few tique
pk . . . . =e t~e.
tiectlY
fiOm
dH(uln)+i(O,~)Vs]
~~(g)
~mmax(Vs(y),VG(u))
=
(i - C)h + P(h)E
P(h) J-
[V’(Y)]
(24)
t
(O,VG(U)– Vs(y))dH(w,
n)
mx
[n= ~(~,~) J-
dfi(y)
(25)
1
Assting
that the mean utitity of the mrket
offer distribution
=e
fite
level, u*. u* is defied
offer distribution
and that of the cmrent
we know that (25) has a unique solution
as the tique
solution
mployer
given by a reservation
utifity
to
VG(U*)= Vs(ti).
Equation
fititing
(25) is greatly
stipfified
case when the period
by convertkg
length,
the trasfomation
t 0 contkuous
and if the discomt
factor
h, becomes
the problem
very s=U.
tO continuous
The fo~owing
time, whifi
resdts
is the
are usefd
for
timw
is specified
m
where r is the rate of interest. With
h, and re-express
(26)
the above restits
handy
we can divide both
sides of (25) by
it as
1 – P(h)..Vs(fi)
=
(& - C)+ F(h) E [vS(y)]
- Vs(ti)
h
Jm””[iEg(nh)JJm=(
n=l
Tting
the .~tit
ov:::v’(y))dH(i)n)]
~~(y)
(27)
of (27) as h + O we get
TVs(z) = a- c+ ‘E [:(y)]
where df represents
~
ifinitess~
+~-~rnrnU
chage
in time.
(O, VG(U) Also, sfice
Vs(yj) dF(u)d~(y),
(28)
VG(U) = u/T we know from (26)
tbt
Tvs(ti)
Usfig
(29) to substitute
for Vs(&),
VG b
= PVG(U*) = U*.
(29)
(28) gives
(30)
80
Equation
(30) represents
the fist
It fOUOws from (30) that =
That is, search wi~ occm
greater th=
if ad
order condtion
individud
ofly
for the solution
WW seach
if =d
if the expected
to the opttial
ofly
increase
stopping
problem.
if
ti discomted
utifity from sem~
is
the cost of semch.
Replacement
of the utifity flow on the cuent
job with its indirect utifity equivalent,
Z = ti e-a~,
into (30) gives
where u* is now ~pficitly
Comparative
Static
a fmction
Results
from
As was noted in the text comparative
Stationmity
is imposed
constant.
men
Equation
(33) c=
Equation
the
equation
in a mefd
r+A
—
() r
Search
flow pm-eter
First
by assting
is imposed,
be rewrittm
utihty
Order
fom
that
a md prices w and p.
Condition
static effects me derived uder
on the model
stationwity
u“
of cment
the aswption
the cment
(32) reduces
(34) a~ows us to derive the fo~owing
comp=ative
+ $ EF(u)
T+A(l–F(w*))<o
–T
=
<o
– F(U*))
(34)
static results:
–ti#e-”5.
a.
offer is a tied
to:
F(u)du
:L’
T + A(1
utifity
as
=fie-.$-c+–
8U*
job
of station=ity.
and
(35)
>-1
(36)
~~—Q5
TtA(l–
au*
8P
–artie-a~
=
8u”
rtA(l–
F(u”))
(38)
‘o
- u*)dF(u)
f~(u
>0
(39)
r + A(l “– F[ti*))
x=
-;
8U*
8T
(37)
F(u*))>o”
=
~:
(u -U*)
dF(u)]
r t A(l – F(U*))
81
<0
(40)
National
Lon@tidinal
SuneYs
mLs)
Discussion Paper Series
m
~
Wchael R. Per@t
HW the Fderti Onve-ent
Uses Dam from
the Natioti bngi~~
SUCYS
A CoWtision of GmWter-Wl&
Pe~ti
htetiem
(CAFO titb Paper-ad Pad ~ertiews @APD in the Natimmf Lon9ti
Sof Youth
9242
WC
Mdels of the Jotit Dete-tion
Labor Supply ad Ftily S@_
The effects of UnempIO~ent Compmtion
on the UnemplO~ent of Youth
9244
EvAmtig
Motitity
9249
92-10
of
Compe~
Tharies
of Worker
F&L.
Mott
Patia B&er
Btimtion of the 1989 Cfrild~
Supplement
in the Natioti Longi~diti
SWcy of Youth
Au&ey Light
huelim
Umta
Gendm D~eraws
Yomg Workem
LIm M. LWch
The hpact of Private Swtor Tmirdng on Ram
ad Gender Wage Dfierentia3s ad the beer
Patte- of Youg Workcm
Evagelos
H EBth
mm=
of Fed.
to the Demopptic
me
M. Ftis
Peters
Hi3f
Jme E. ONeiU
in the @t Behtior
of
Lahr Supply mrd F@tY
Cycle
A Stidy of Intercohoti Charrge in Womm’s
Work Pattern md -rigs
92-11
Arlwn tibtiti
Jamb Mex ~emarr
Ltida Waite
Women’s Emplo~ent.Dfing
md Follotig Bti
92-12
Lcc A. LilI~d
Work E~riencq
md Wage Gofi
92-13
Joseph G. Aftonji
TboA. _
Ftily
Ba&gowd
pre~
Job TenWe, Job Sepamtiom
md bbor Hket
Outcom=
92-14
92-15
Mrge J, BOrjas
Stqhm G. Bronara
Stephen J. Trejo
SeM-Seldon
md Iotefi
Wgration in the
Urdtrd Staks
JarrreaJ. Hmh
Stephen V. -emn
Peter Z. Schmhet
93-16
Pardcipation in Low-Wage mr
YOmg Men
Markets by
94-17
Retimmeni in a Ftily tintm.
for Hmbarrdsand Wiva
A Sticti
94-18
A-
Light
94-19
Christopher J. Rti
Model
Trtitiom
from %hwi to Work A SWey of
Research Utig the Natioti Longitititi
SWeys
Mgh Schwl Emplopent
ti-ption
or
Invetient
95-20
Mark Lowenstein
J-
SpIeVer
IMo@ Trtifig
A Rtiew of Etisting Data md
Some New Etidenti”
95-21
Jamb Mex Me-
Ctiatieting
NLSY Data
95-22
Jmb Aex fGeArleen Leibntiti
Emplo~ent
95-23
Stephen G. Brou
tiol Moore
Incentive Pay, Momtioq
ad ~n~
from the Natioti Longituti
Smq
95-24
DonaJd O. Parsom
The Evolting Smc~r~ of Fetie Work Atitities:
Etidenw from the Natioti hn~titid
SW9S of
Wmre Women SW~, 1967-1989
95-25
Dodd
O.
Parsom
Leave for ~tti~.
Continuity hong
Poverty WCS
bong
from the Natiod
Lon@tidid
95-26
& Bartel
Nachm Siche-
Twhrdogid
Ctige
Yong Workers
95-27
Au*
High Schml Emplo~ent
95-28
hm
Bmda
R&k
Griti
Michael R Pergtit
96-29
Light
Mtieling
the
NN Mothers
Etidenm
of Youti
Maine Women
Sueya,
Etiden~
1967-1989
ad the Skill A~isition
The ~d
of Irrtefim Length on Atition
National Longititi
SWq of Yoti
of
h the
Capiti Mmket Conskaink, Parenti Wdti md the
Tmsition to seK-fiplopent
among Men arrd
Women
%-30
J~ Grogger
Nick Rom
The Intergenerational Eff@ of Fa*erlessnes on
Edu~tiod
Atmiment md Ent~-lml Wa~
96-31
Jomti
Ttiting,
Wagw, and the Hum
96-32
Mchael R. Pergtiit
Asasing
Sula
Schwl to Work Tmnsitions in tie Utitd
96-33
Eric P. Slade
h Adysis
of the Coquenw
of Employer
Li~d
H@lti Inmww
Coverage in U.S.
Vem
tipiti
Mtil