College

Buchtel College of Arts and Sciences (BCAS)

Date of Last Revision

2020-05-09 06:23:54

Major

Economics

Honors Course

Labor Market Analysis and Evaluation

Number of Credits

3

Degree Name

Bachelor of Arts

Date of Expected Graduation

Spring 2021

Abstract

This paper examines the impact of the replacement ratio on re-employment wages during the great recession. This is done using a data set from IPUMS CPS displaced workers supplement between 2005 and 2012. Using OLS analysis, I estimated the impacts of the replacement ratio on the ratio of re-employment wages to pre-unemployment wages. I found that a replacement ratio of one would lead to a 77.6% increase in the ratio of re-employment wages to pre-unemployment wages, without the consideration of any other variables. The findings of the replacement ratio support economic theory and contradict the findings of some major papers on the subject, including the paper I based my model off. The analysis in this paper could be strengthened with weekly wage data as well as with the addition of more variables controlling for the impacts of a recession.

Research Sponsor

Dr. Francesco Renna

First Reader

Dr. Steven Myers

Second Reader

Dr. Michael Nelson

Honors Faculty Advisor

Dr. Elizabeth Erickson

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