The demand side of the penalty for intermittent labour market behaviour

Abstract

The purpose of this article is to determine whether there is any empirical evidence for the contribution of employer, or demand-side, determinants of the labour market intermittency penalty. The documented negative relationship between the size of the penalty and the labour market strength is interpreted as evidence that labour market intermittency is viewed as an undesirable characteristic that employers penalize more severely when the labour market is weak.

The opinions expressed in this article are those of the author and do not necessarily reflect those of the Federal Reserve Bank of Atlanta, nor the Federal Reserve System. Comments and suggestions from Francine Blau and Solomon Polachek were greatly appreciated.

Notes

¹The RAND HRS Data file is an easy to use longitudinal data set of the HRS data. It was developed at RAND with funding from the National Institute on Aging and the Social Security Administration. A more detailed description of the data source can be found in Hotchkiss and Pitts (2007a).

²Detailed sample means can be found in Hotchkiss and Pitts (2007a).

³The results presented correspond to movements in the real wage; results for nominal wages are very similar.