Template-Type: ReDIF-Paper 1.0 Author-Name: Julien Champagne Author-Name-First: Julien Author-Name-Last: Champagne Author-Name: André Kurmann Author-Name-First: André Author-Name-Last: Kurmann Author-Name: Jay Stewart Author-Name-First: Jay Author-Name-Last: Stewart Title: Reconciling the divergence in aggregate U.S. wage series Abstract: According to data from the Labor Productivity and Costs (LPC) program, average hourly real compensation in the United States has grown consistently over time and become markedly more volatile since the mid-1980s. By contrast, data from the Current Employment Statistics (CES) imply that average hourly real earnings has mostly stagnated and become substantially less volatile. We show that differences in earnings concept and differences in worker coverage account for the majority of this divergence in growth and volatility. The results have important implications for the appropriate choice of aggregate wage series for macroeconomic analysis. Creation-Date: 2016 File-URL: https://www.bls.gov/osmr/research-papers/2016/pdf/ec160010.pdf File-Format: Application/pdf Number: 486 Handle: RePEc:bls:wpaper:486 Template-Type: ReDIF-Paper 1.0 Author-Name: Erick Sager Author-Name-First: Erick Author-Name-Last: Sager Title: Solving the Incomplete Markets Model With Aggregate Uncertainty: The Method of Mixtures Abstract: In this paper I propose a new method for computing equilibrium in economies featuring heterogeneous agents, incomplete markets and aggregate uncertainty. The new method approximates the endogenous joint distribution of wealth and income by replacing stochastic simulation procedures with iteration on distribution functions. By construction, the approximate distribution satisfies an intratemporal consistency condition that imposes stationarity on both the distribution and the law of motion for aggregate state variables. I show that the Method of Mixture Distributions is capable of obtaining a solution faster than existing computational algorithms while attaining a high level of accuracy. Lastly, I provide an extension of the algorithm for computing equilibrium in an economy with non-trivial market clearing, showing that the algorithm is suitable for computing models in which prices cannot be forecasted by a finite set of moments from the distribution. Creation-Date: 2016 File-URL: https://www.bls.gov/osmr/research-papers/2016/pdf/ec160020.pdf File-Format: Application/pdf Number: 487 Handle: RePEc:bls:wpaper:487 Template-Type: ReDIF-Paper 1.0 Author-Name: Kevin E. Cahill Author-Name-First: Kevin E. Author-Name-Last: Cahill Author-Name: Michael D. Giandrea Author-Name-First: Michael D. Author-Name-Last: Giandrea Author-Name: Andrew Dyke Author-Name-First: Andrew Author-Name-Last: Dyke Author-Name: John Tapogna Author-Name-First: John Author-Name-Last: Tapogna Title: Pension Generosity in Oregon and its Impact on the K12 Workforce Abstract: Oregon’s Tier One Public Employees Retirement System (PERS), which covered members prior to January 1, 1996, was one of the most generous pension plans ever devised. In this paper we document the generosity of Oregon’s Tier One plan and examine the extent to which Oregon’s pension system impacted its K12 workforce, as greater pension generosity could incentivize longer tenures. In the case of Oregon, however, the true magnitude of its pension generosity was largely unknown to teachers until just prior to retirement. As such, any economic incentives to promote longer tenure among mid-career teachers were muted, while the plan’s generosity, once revealed just prior to retirement, created strong wealth effects that enabled earlier K12 exits. Based on an analysis of more than 57,000 Oregon teachers active from 2000 to 2013 we find that mid-career quit rates among teachers covered under Tier One did not differ systematically from those covered under Oregon’s more recent pension plan provisions. Quit rates among Oregon’s Tier One teachers were even somewhat higher than those among teachers in Washington who were covered by plans that were substantially less generous. Further, using work histories on 8,621 teachers in Oregon who were aged 50 and older in 2000 we find that the generosity of Oregon’s Tier One pension encouraged earlier departures from the K12 workforce, with teachers leaving, on average, one year earlier than what would have been expected under Oregon’s full formula, defined-benefit plan. We conclude that pension generosity alone does not incentivize longer tenure—even in the extreme case of Oregon—as the true generosity of a plan must be known to employees in advance. Creation-Date: 2016 File-URL: https://www.bls.gov/osmr/research-papers/2016/pdf/ec160030.pdf File-Format: Application/pdf Number: 488 Handle: RePEc:bls:wpaper:488 Template-Type: ReDIF-Paper 1.0 Author-Name: Maury Gittleman Author-Name-First: Maury Author-Name-Last: Gittleman Author-Name: Kristen Monaco Author-Name-First: Kristen Author-Name-Last: Monaco Author-Name: Nicole Nestoriak Author-Name-First: Nicole Author-Name-Last: Nestoriak Title: The Requirements of Jobs: Evidence from a Nationally Representative Survey Abstract: The Occupational Requirements Survey (ORS) is a new survey at the Bureau of Labor Statistics which collects data on the educational, cognitive, and physical requirements of jobs, as well as the environmental conditions in which the work is performed. Using pre-production data, we provide estimates of a subset of elements by broad industry and occupation and examine the relationship between the cognitive elements and measures of education and training. We exploit the overlap between ORS and the National Compensation Survey to estimate models of the returns to different occupational requirements. Finally, we examine the relationship between occupational requirements and occupational safety measures and outline potential research uses of the Occupational Requirements Survey. Creation-Date: 2016 File-URL: https://www.bls.gov/osmr/research-papers/2016/pdf/ec160040.pdf File-Format: Application/pdf Number: 489 Handle: RePEc:bls:wpaper:489 Template-Type: ReDIF-Paper 1.0 Author-Name: Timothy Erickson Author-Name-First: Timothy Author-Name-Last: Erickson Title: On Incorrect Signs in Hedonic Regresion Abstract: I compute the equilibrium in a model of a differentiated-product market to show that, even when all consumers in the market agree that more of each product characteristic is preferred to less, an OLS regression of market-clearing prices on product characteristics can yield negative coeffcients on the characteristics. Creation-Date: 2016 File-URL: https://www.bls.gov/osmr/research-papers/2016/pdf/ec160050.pdf File-Format: Application/pdf Number: 490 Handle: RePEc:bls:wpaper:490 Template-Type: ReDIF-Paper 1.0 Author-Name: Kevin E. Cahill Author-Name-First: Kevin E. Author-Name-Last: Cahill Author-Name: Andrew Dyke Author-Name-First: Andrew Author-Name-Last: Dyke Author-Name: Michael D. Giandrea Author-Name-First: Michael D. Author-Name-Last: Giandrea Author-Name: John Tapogna Author-Name-First: John Author-Name-Last: Tapogna Title: The Impact of Oregon´s Pension Legacy Costs on New Teacher Turnover and Quality Abstract: hPension legacy costs can restrict the amount of resources available for current public education and make it more difficult to attract and retain high quality teachers. Oregon provides a useful case study in pension legacy costs because many school districts in the state are now reallocating General Fund expenditures to cover sizeable past pension promises. We first describe how Oregon’s past pension promises, as compared with nearby Washington’s, affect the level of resources available to compensate new teachers. We then assess potential impacts by examining how new teacher turnover differs in districts along the Oregon-Washington border and within Oregon across school districts. We find early-career quit rates in school districts on the Oregon side of the Oregon-Washington border have exceeded those on the Washington side in recent years, and overall teacher experience on the Oregon side has fallen below that on the Washington side. Further, using district-level variation within Oregon, we find early-career quit propensities are positively associated with the percentage of General Fund revenues allocated to PERS expenditures. These findings are consistent with the hypothesis that Oregon’s pension legacy costs negatively affect current teacher quality and retention. Creation-Date: 2016 File-URL: https://www.bls.gov/osmr/research-papers/2016/pdf/ec160060.pdf File-Format: Application/pdf Number: 491 Handle: RePEc:bls:wpaper:491 Template-Type: ReDIF-Paper 1.0 Author-Name: Brett Matsumoto Author-Name-First: Brett Author-Name-Last: Matsumoto Title: Lighting the Fires: Explaining Youth Smoking Initiation and Experimentation in the Context of a Rational Addiction Model with Learning Abstract: This paper examines the dynamics of youth smoking behavior using a model of rational addiction with learning. Individuals in the model face uncertainty regarding the parameters that determine their utility from smoking. Through experimentation, individuals learn about how much they enjoy smoking cigarettes as well as the effects of reinforcement, tolerance, and withdrawal. The addition of learning to the dynamic optimization problem of adolescents provides an explanation for the experimentation of the non-smoker. I estimate the parameters of the model using data from the Na- tional Longitudinal Survey of Youth 1997 and compare the overall fit of the model to the model without learning. The estimated model is also used to analyze the effect of cigarette taxes and anti-smoking policies. I find that the model with learning is better able to fit the observed data and that cigarette taxes are not only effective in reducing the level of youth smoking, but can even increase welfare for some individuals. Creation-Date: 2016 File-URL: https://www.bls.gov/osmr/research-papers/2016/pdf/ec160070.pdf File-Format: Application/pdf Number: 492 Handle: RePEc:bls:wpaper:492