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Worker turnover at the firm level and crowding out of lower educated workers

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  • Berg, Gerard J. van den

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Gautier, Pieter A.
  • Ours, Jan C.

Abstract

In The Netherlands, as in many countries: unemployment rates of lower educated workers are higher and more cyclical than unemployment rates of higher educated workers. In this paper we test whether this is caused by the fact that more highly educated individuals occupy simple jobs in cyclical downturns. We use a unique firm-worker dataset to investigate this hypothesis. In addition, we examine to what extent workers with more years of schooling earn higher wages than their less educated colleagues at the same job level in the same firm. We find that at one of the lower job complexity levels, the difference between schooling of the inflow and the outflow increases in cyclical downturns. At the same time, workers with surplus schooling earn somewhat lower wages at this job level. For the other job complexity levels we find no evidence for crowding out.

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Bibliographic Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0049.

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Date of creation: 1998
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Handle: RePEc:dgr:vuarem:1998-49

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Web page: http://www.feweb.vu.nl

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Keywords: unemployment; wages; job turnover; education; business cycle;

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  1. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  2. Hartog, Joop & Oosterbeek, Hessel, 1988. "Education, allocation and earnings in the Netherlands: 0verschooling?," Economics of Education Review, Elsevier, vol. 7(2), pages 185-194, April.
  3. James Albrecht & Susan Vroman, 2002. "A Matching Model with Endogenous Skill Requirements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 283-305, February.
  4. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
  5. McCormick, Barry, 1990. "A Theory of Signalling during Job Search, Employment Efficiency, and "Stigmatised" Jobs," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 299-313, April.
  6. Gautier, P.A. & Berg, G. van den & Ours, J.C. van & Ridder, G., 1999. "Separations at the firm level," Open Access publications from Tilburg University urn:nbn:nl:ui:12-81207, Tilburg University.
  7. van Ours, J. C. & Ridder, G., 1995. "Job matching and job competition: Are lower educated workers at the back of job queues?," European Economic Review, Elsevier, vol. 39(9), pages 1717-1731, December.
  8. Ours, J.C. van & Ridder, G., 1995. "Job Matching and Job Competition: Are Lower Educated Workers at the Back of Job Queues?," Open Access publications from Tilburg University urn:nbn:nl:ui:12-142162, Tilburg University.
  9. Berg, G. van den & Gautier, P.A. & Ours, J.C. van & Ridder, G., 1998. "Worker turnover at the firm level and crowding out of lower educated workers," Discussion Paper 98.104, Tilburg University, Center for Economic Research.
  10. Hersch, Joni, 1991. "Education Match and Job Match," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 140-44, February.
  11. Gautier, Pieter A, 2002. "Unemployment and Search Externalities in a Model with Heterogeneous Jobs and Workers," Economica, London School of Economics and Political Science, vol. 69(273), pages 21-40, February.
  12. John Tyler & Richard J. Murnane & Frank Levy, 1995. "Are Lots of College Graduates Taking High School Jobs? A Reconsiderationof the Evidence," NBER Working Papers 5127, National Bureau of Economic Research, Inc.
  13. Teulings, Coen & Koopmanschap, Marc, 1989. "An econometric model of crowding out of lower education levels," European Economic Review, Elsevier, vol. 33(8), pages 1653-1664, October.
  14. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  15. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
  16. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
  17. Russell W. Rumberger, 1987. "The Impact of Surplus Schooling on Productivity and Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 24-50.
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