A structural econometric model of retirement of dual-career couples is specified and estimated with panel data from the National Longitudinal Survey of Mature Women. A coincidence of spouses retiring together, despite the younger ages of wives, suggests explicit efforts at coordination. The estimates suggest that one reason is a correlation of tastes for leisure. More important, each spouse, and perhaps husbands in particular, values retirement more once their spouse has retired. The opportunity set accounts for peaks in the retirement hazards of each spouse individually, but not for peaks in the simultaneous retirement of both spouses. Copyright 2000 by University of Chicago Press.

This article formulates a general equilibrium model for analyzing the youth labor market. At the heart of the model is an interplay between a labor force with heterogeneous ability levels and a minimum wage restriction. Ability affects performance on skilled jobs and, to a lesser extent, on unskilled jobs. Workers are less productive as youths than as adults. The model is applied to rationalize several results from available studies and to analyze the effects of three representative policies: a youth subminimum wage, subsidies paid to firms that hire youths, and subsidies that offset the costs of on-the-job training.

A structural life-cycle retirement model with an improved specification over previous models is used to analyze and compare the long-run effects on the labor supply of older workers of the 1983 Social Security reforms. The effects of separate provisions from the 1983 amendments are examined. These include the raising of the normal retirement age to 67, the increase in the delayed retirement credit to 8%, and the lowering of the reduction rate for earnings over the test amount to $1.00 for every $3.00 of earnings.

This paper addresses Alvin Roth’s findings of market contracting at times earlier than optimal for market participants, which Roth describes as market “unraveling,” a market failure he proposes to solve by designing centralized buyer‐seller matching programs. This paper shows that, while Roth’s engineering solutions are ingenious, the early contracting phenomena derive from labor market monopsony. Under monopsony, price is unavailable to clear the market; time of contract becomes the currency for working out market forces. Roth’s matching serves to shore up the monopsony and would be unnecessary if the monopsony were removed; a superior solution is to end the monopsony.

This study examines aspects of pay and promotion in corporate hierarchies in the context of tournament theory. Evidence supports the tournament perspective in that most positions are filled through promotion and pay rises strongly with hierarchical level. Furthermore, the winner's prize in the CEO tournament increases with the number of competitors for the CEO position. Not all evidence is supportive: the square of the number of competitors is negatively associated with the CEO prize. Additionally, firms do not appear to maintain short-term promotion incentives, as lengthier time in position prior to a promotion reduces the pay increase from the promotion. Copyright 2001 by University of Chicago Press.

Risk aversion enters many theoretical models of human capital investment, but attitudes toward risk have not been incorporated in empirical models of human capital investment. This article develops a model of the joint investment in financial wealth and human wealth to show that human capital investment is an inverse function of the degree of relative risk aversion. Using data from the Survey of Consumer Finances, I find that wage growth is positively correlated with preferences for risk taking. More-educated individuals are also more likely to be risk takers, thus risk taking explains a portion of the returns to education.

This paper hypothesizes that the quit propensity of married men rises with an increase in their wives' income. Assuming that individuals are risk averse and that quitting is risky, the wife's income increases the husband's expected value of quitting by reducing the variance of expected family income. Using the longitudinal data from the Michigan Panel Study of Income Dynamics (PSID), the wife's income is found to have a large effect on quits. The average husband's quit rate increases by about 45% when the wife's income rises from zero to two-thirds that of the husband's. The wife's income effect nearly offsets the negative effect that marriage typically has on male quit rates.

More mothers engage in marketplace work today than ever before, with over 33% returning to work by the time their child is 3 months old. This article identifies the effects of maternal marketplace work in the initial months of an infant’s life on the child's cognitive development. Results suggest that such work in the first year of a child’s life has detrimental effects. Where significant, the results also indicate negative effects of maternal employment in the child’s first quarter of life. However, the negative effects of maternal marketplace work are partially offset by positive effects of increased family income.

We analyze the relationship between how long an employer has been in business (firm age) and wages. Using data from special supplements to the Survey Research Center’s monthly Survey of Consumers, we find that firms that have been in business longer pay higher wages (as previous studies found), but when we control for worker characteristics, the relationship becomes insignificant or negative. There is some evidence that the relationship is not monotonic, with wages falling and then rising with years in business. Established employers appear to make greater use of back‐loaded compensation, consistent with their higher probability of remaining in business.

Decomposing the year-to-year changes in the earnings distribution from 2004 to 2013, we analyze the role of the employer in explaining earnings inequality in the United States. Movements between the bottom, middle, and top involve 20.5 million workers each year. Another 19.9 million move between employment and nonemployment. There are large gains from working at a top-paying firm for all skill types. Working for a high-paying firm produces benefits today, through higher earnings, that persist through an increase in the probability of upward mobility. High-paying firms facilitate moving workers to the top of the distribution and keeping them there.