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An Estimable Dynamic General Equilibrium Model of Work, Schooling and Occupational Choice (2001)
| Citations: | 48 - 2 self |
BibTeX
@TECHREPORT{Lee01anestimable,
author = {Donghoon Lee},
title = {An Estimable Dynamic General Equilibrium Model of Work, Schooling and Occupational Choice},
institution = {},
year = {2001}
}
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Abstract
This paper develops and estimates a dynamic general equilibrium overlapping generations model of career decisions. The model is fit to data on life cycle employment, schooling and occupation decisions, and on life cycle labor earnings, within and between cohorts observed in the US between 1968 and 1993. Based on the estimates of the model, the impact of cohort size on skill prices and, consequently, on career decisions is assessed. Compared to a baseline case in which cohort size increased at a steady (average) rate and the fertility process was stationary, it is found that the male baby bust generations born in the 1930s and 1940s faced higher skill prices (by as much as 2.0%), completed college at a higher rate (by as much as 0.3 percentage points) and worked more over the lifetime (by as much as 0.1 years). In contrast, the males from the baby boom generationsborninthe1950sand1960sfacedlowerskillprices(byasmuchas1.5%),completed college at a lower rate (by as much as 1.0 percentage points) and worked less over the lifetime (by as much as 0.1 years). The impact of cohort size is found to differ across gender due to the differential impact of fertility on the value of home production: unlike males, the female baby
Keyphrases
occupational choice estimable dynamic general equilibrium model cohort size skill price percentage point career decision differential impact generation model baseline case female baby dynamic general equilibrium occupation decision life cycle employment fertility process male baby bust generation home production life cycle labor earnings baby boom
