Lalith Munasinghe

Wage Growth and the Theory of Turnover

Theories of turnover and wage dynamics have studied the impact of wage levels on turnover, but they have failed explicitly to model the role of wage growth in predicting turnover. This article presents a theory of turnover that explains why within‐job wage growth reduces the likelihood of worker‐firm separations. The model determines the evolution of value among jobs that differ systematically in permanent rates of wage growth and shows that the value of high wage‐growth jobs increases faster. With additional assumptions about the search process, this proposition implies that high wage‐growth jobs are less likely to end.

Why Do Dancers Smoke? Smoking, Time Preference, and Wage Dynamics

Time preference is a key determinant of investments in human capital and occupational choice. Individuals with higher discount rates are less likely to invest in human capital and hence more likely to select into careers with lower and flatter earnings profiles. Since discount rates are unobservable, we use smoking behavior as a proxy to study the effect of discounting on wage dynamics. We find that smokers, compared to non-smokers, earn lower wages at the time they enter the labor market and experience substantially lower rates of wage growth. These differences are consistent with the discounting hypothesis, and highly robust to an extensive array of control variables.

Globalization and the Rate of Technological Progress: What Track and Field Records Show

The past century and a quarter has seen frequent improvements in track and field records. We attempt to estimate what proportion of the speed of record breaking is due to globalization (competitors from more countries) and what proportion is due to technological progress (better equipment and training techniques). It appears that technological change is the chief driving force but that technological progress is improving the performance of seasoned elite athletes faster than it is improving the performance of adolescents. Both our results and our methods may have wider application.

Specific Training Sometimes Cuts Wages and Always Cuts Turnover

Turnover falls with tenure, but wages do not always rise (and sometimes fall) with tenure. We reconcile these findings by revisiting an old issue: how gains from firm‐specific training are split between workers and firms. The division is determined by a stationary distribution of outside offers. The lower the wage a firm pays to a specifically trained worker, the more profit it makes but the more likely the employee is to leave. The optimal time paths of wages and turnover show that, if marginal product is increasing, wages need not be increasing but it always implies a falling turnover rate.

Climate change: a new metric to measure changes in the frequency of extreme temperatures using record data

Consensus on global warming is the result of multiple and varying lines of evidence, and one key ramification is the increase in frequency of extreme climate events including record high temperatures. Here we develop a metric—called “record equivalent draws” (RED)—based on record high (low) temperature observations, and show that changes in RED approximate changes in the likelihood of extreme high (low) temperatures. Since we also show that this metric is independent of the specifics of the underlying temperature distributions, RED estimates can be aggregated across different climates to provide a genuinely global assessment of climate change. Using data on monthly average temperatures across the global landmass we find that the frequency of extreme high temperatures increased 10-fold between the first three decades of the last century (1900–1929) and the most recent decade (1999–2008). A more disaggregated analysis shows that the increase in frequency of extreme high temperatures is greater in the tropics than in higher latitudes, a pattern that is not indicated by changes in mean temperature. Our RED estimates also suggest concurrent increases in the frequency of both extreme high and extreme low temperatures during 2002–2008, a period when we observe a plateauing of global mean temperature. Using daily extreme temperature observations, we find that the frequency of extreme high temperatures is greater in the daily minimum temperature time-series compared to the daily maximum temperature time-series. There is no such observable difference in the frequency of extreme low temperatures between the daily minimum and daily maximum.

Learning About the Employer-Employee Match When Workers Refer Job Candidates: Referrals and Search Efficiency

This paper investigates the effect of information transmitted by referrals on search efficiency. We test several implications of our model using data from a call center company that contain rich information on applicants, employees, and referrers. The joint estimation of job offers, acceptances, turnover, and performance allows us to identify the contribution of referrals to search efficiency from the differences in expected performance between referred and non-referred applicants. The results show that referrals induce selection on unobservables at the job offer stage, which in turn drives referred employees to perform better, receive early promotions and stay longer on the job.

A New Metric for Indian Monsoon Rainfall Extremes

AbstractExtreme monsoon rainfall in India has disastrous consequences, including significant socioeconomic impacts. However, little is known about the overall trends and climate factors associated with extreme rainfall because rainfall greatly varies across India and because few appropriate methods are available to measure extreme rainfall in the context of such heterogeneity. To provide a comprehensive assessment of extreme monsoon rainfall, the authors developed a metric using record rainfall data to measure the changes in the likelihood of extreme high and extreme low rainfall over time; this metric is independent of the characteristics of the underlying rainfall distributions. Hence, the metric is ideally suited to aggregate extreme rainfall information across heterogeneous regions covering India. The authors found that from 1930 to 2013, the likelihood of extreme high and extreme low rainfall increases 2-fold and 4-fold, respectively. These overall trend increases are driven by anomalous increases, p...