Worker Betas: Five Facts about Systematic Earnings Risk
Fatih Guvenen, Sam Schulhofer-Wohl, Jae Song, Motohiro Yogo
American Economic Review · 2017 · Volume 107 · Issue 5
Abstract
The magnitude of and heterogeneity in systematic earnings risk has important implications for various theories in macro, labor, and financial economics. Using administrative data, we document how the aggregate risk exposure of individual earnings to GDP and stock returns varies across gender, age, the worker's earnings level, and industry. Aggregate risk exposure is U-shaped with respect to the earnings level. In the middle of the earnings distribution, aggregate risk exposure is higher for males, younger workers, and construction and durable manufacturing. At the top of the earnings distribution, aggregate risk exposure is higher for older workers and finance.
Keywords
Consumer Economics: Empirical Analysis, Macroeconomics: Production, Economics of Gender, Non-labor Discrimination, Human Capital, Skills, Occupational Choice, Labor Productivity, Wage Level and Structure, Wage Differentials, Industry Studies: Manufacturing: General, Construction
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