Cyclical Upgrading of Labor and Employment Differences across Skill Groups
AbstractThis paper examines the cyclical properties of employment rates in a search and matching model that features heterogeneous workers and jobs. Firms can create vacancies for jobs that that require either a high- or a low-skill level. High-skill workers are best suited for high-skill jobs, but are also qualified for low-skill jobs, whereas low-skill workers are only qualified for low-skill jobs. My analysis highlights the importance of a vertical type of transitory skill-mismatch, which takes the form workers accepting jobs below their skill level to escape unemployment and upgrading by on-the-job search, in explaining why typically employment is lower and more procyclical at lower skill levels. I show that this feature makes low-skill vacancy creation more strongly procyclical than high-skill vacancy creation. The model is also consistent with important features of the labor market, such as a procyclical rate of job-to-job transitions and evidence that the educational levels of new hires within occupations are higher in recessions and lower in booms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 14-2010.
Length: 57 pages
Date of creation: Dec 2010
Date of revision:
Contact details of provider:
Web page: http://www.econ.ucy.ac.cy
Other versions of this item:
- Chassamboulli Andri, 2011. "Cyclical Upgrading of Labor and Employment Differences across Skill Groups," The B.E. Journal of Macroeconomics, De Gruyter, vol. 11(1), pages 1-42, May.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
- NEP-BEC-2010-12-18 (Business Economics)
- NEP-LAB-2010-12-18 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- van Ours, Jan & Ridder, Geert, 1992. "Vacancies and the Recruitment of New Employees," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 138-55, April.
- 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.
- Brendan Epstein, 2012. "Heterogeneous workers, optimal job seeking, and aggregate labor market dynamics," International Finance Discussion Papers 1053, Board of Governors of the Federal Reserve System (U.S.).
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.