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Occupational Mobility and the Business Cycle

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  • Giuseppe Moscarini
  • Francis G. Vella

Abstract

Do workers sort more randomly across different job types when jobs are harder to find? To answer this question, we study the mobility of male workers among three-digit occupations in the matched files of the monthly Current Population Survey over the 1979-2004 period. We clean individual occupational transitions using the algorithm proposed by Moscarini and Thomsson (2008). We then construct a synthetic panel comprising annual birth cohorts, and we examine the respective roles of three potential determinants of career mobility: individual ex ante worker characteristics, both observable and unobservable, labor market prospects, and ex post job matching. We provide strong evidence that high unemployment somewhat offsets the role of individual worker considerations in the choice of changing career. Occupational mobility declines with age, family commitments and education, but when unemployment is high these negative effects are weaker, and reversed for college education. The cross-sectional dispersion of the monthly series of residuals is strongly countercyclical. As predicted by Moscarini (2001)'s frictional Roy model, the sorting of workers across occupations is noisier when unemployment is high. As predicted by job-matching theory, worker mobility has significant residual persistence over time. Finally, younger cohorts, among those in the sample for most of their working lives, exhibit increasingly low unexplained career mobility.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13819.

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Date of creation: Feb 2008
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Handle: RePEc:nbr:nberwo:13819

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Citations

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Cited by:
  1. Coen Teulings & Pieter A. Gautier, 2011. "Sorting and the output loss due to search frictions," 2011 Meeting Papers 169, Society for Economic Dynamics.
  2. Carlos Carrillo-Tudela, 2012. "Job Search, Human Capital and Wage Inequality," CESifo Working Paper Series 3979, CESifo Group Munich.
  3. Lkhagvasuren, Damba, 2012. "Big locational unemployment differences despite high labor mobility," Journal of Monetary Economics, Elsevier, vol. 59(8), pages 798-814.
  4. Ronald Wolthoff, 2013. "It's About Time: Implications of the Period Length in an Equilibrium Search Model," Working Papers tecipa-476, University of Toronto, Department of Economics.
  5. Damba Lkhagvasuren, 2005. "Big Locational Differences in Unemployment Despite High Labor Mobility," Working Papers 12002, Concordia University, Department of Economics, revised Feb 2012.
  6. David L. Fuller & Marianna Kudlyak & Damba Lkhagvasuren, 2013. "Productivity insurance: the role of unemployment benefits in a multi-sector model," Working Paper 13-11, Federal Reserve Bank of Richmond.
  7. Chris Robinson, 2011. "Occupational Mobility, Occupation Distance and Specific Human Capital," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20115, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  8. Elena Pastorino, 2013. "Job matching within and across firms," Staff Report 482, Federal Reserve Bank of Minneapolis.
  9. Paul Gomme & Damba Lkhagvasuren, 2011. "The Cyclicality of Search Intensity in a Competitive Search Model," Working Papers 11003, Concordia University, Department of Economics.
  10. Carrillo-Tudela, Carlos & Hobijn, Bart & Visschers, Ludo, 2014. "Career changes decline during recessions," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
  11. Summerfield, Fraser, 2014. "Labor Market Conditions, Skill Requirements and Education Mismatch," CLSSRN working papers clsrn_admin-2014-19, Vancouver School of Economics, revised 28 Apr 2014.
  12. Wolthoff, Ronald P., 2011. "It's About Time: Implications of the Period Length in an Equilibrium Job Search Model," IZA Discussion Papers 6002, Institute for the Study of Labor (IZA).
  13. Crespo, Nuno & Simoes, Nadia & Moreira, Sandrina B., 2013. "Gender Differences in Occupational Mobility – Evidence from Portugal," MPRA Paper 49195, University Library of Munich, Germany.

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