Main Content

Docbase - Publication Database of the CESifo Group

Publication Details

Nagl, Wolfgang

Better Safe than Sorry? The Effects of Income Risk, Unemployment Risk and the Interaction of these Risks on Wages

Better Safe than Sorry? The Effects of Income Risk, Unemployment Risk and the Interaction of these Risks on Wages We examine whether income and unemployment risks are compensated by individual wages. Using a portfolio approach we show that the marginal income risk effect on wages is always positive whereas the marginal unemployment risk effect crucially depends on the income risk. The interaction effect between both risk measures is negative. Using administrative panel data from Germany we confirm the theoretically predicted signs for both risks and their interaction effect.

02-24

Ifo Working Paper No. 148

Publisher: Ifo Institut, Munich, 2012

Keywords: Income risk, unemployment risk, interaction effect, wages

JEL Classification:
[J300] Wages, Compensation, and Labor Costs: General
[J310] Wage Level and Structure; Wage Differentials
[J640] Unemployment: Models, Duration, Incidence, and Job Search

Article number: 12022012148000

Download free (PDF 633 KB)

A large number of publications can be downloaded using “free download”. If the download and/or the printed version can be ordered, “add to basket” is displayed next to the price. The prices are shown including value-added tax but without possible mailing charges and without possible discounts. In ordering the printed versions, a choice is possible between payment on invoice or credit card payment. When purchasing downloads, the files are available immediately after credit card payment. Details on Online Ordering