Inter-Industry Mobility and the Cyclical Upgrading of Labor
AbstractWe investigate whether a market-clearing model of the labor market is consistent with the cyclical upgrading of labor: workers tend to move to higher paying industries in expansions and to lower paying industries in contractions. By applying Roy's (1951) model of self-selection to industry fluctuations, we show that cyclical upgrading can be consistent with market clearing. Applying the model to inter-industry mobility patterns in panel data, we find data of substantial selection by comparative advantage. However, the panel data reveal a selection process that is consistent with cyclical upgrading. Thus the model does not simultaneously account for interindustry mobility in panel data and cyclical upgrading.
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Date of creation: Aug 1992
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Other versions of this item:
- McLaughlin, Kenneth J & Bils, Mark, 2001. "Interindustry Mobility and the Cyclical Upgrading of Labor," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 94-135, January.
- MarkMcLaughlin Bils & Kenneth J., 1992. "Inter-industry Mobility and the Cyclical Upgrading of Labor," University of Chicago - George G. Stigler Center for Study of Economy and State 81, Chicago - Center for Study of Economy and State.
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