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Jacks of All Trades and Masters of One: Declining Search Frictions and Unequal Growth

Author

Listed:
  • Paolo Martellini
  • Guido Menzio

Abstract

Declining search frictions generate productivity growth by allowing workers to find jobs for which they are better suited. For "jacks of all trades"—workers whose productivity is similar across different jobs in their labor market—declining search frictions lead to minimal growth. For "masters of one trade"—workers whose productivity varies a great deal across different jobs in their labor market—declining search frictions lead to fast growth. A rudimentary calibration suggests that differential returns to declining search frictions may account for a non-negligible fraction of the wage growth differential between routine and nonroutine workers.

Suggested Citation

  • Paolo Martellini & Guido Menzio, 2021. "Jacks of All Trades and Masters of One: Declining Search Frictions and Unequal Growth," American Economic Review: Insights, American Economic Association, vol. 3(3), pages 339-352, September.
    • Handle: RePEc:aea:aerins:v:3:y:2021:i:3:p:339-52
    DOI: 10.1257/aeri.20200576
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    Citations

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    Cited by:

    1. Lukas B. Freund, 2025. "Superstar Teams," CESifo Working Paper Series 12303, CESifo.
    2. Griffy, Benjamin & Rabinovich, Stanislav, 2023. "Worker selectivity and fiscal externalities from unemployment insurance," European Economic Review, Elsevier, vol. 156(C).
    3. Piotr Denderski & Florian Sniekers, 2024. "Declining Search Frictions, Unemployment and Self-Employment," The Economic Journal, Royal Economic Society, vol. 134(659), pages 1100-1145.
    4. Freund, L. B., 2022. "Superstar Teams," Cambridge Working Papers in Economics 2276, Faculty of Economics, University of Cambridge.
    5. Xiao, Jing & Lindholm Dahlstrand, Åsa, 2024. "Acqui-hiring and deep-tech ventures: Evidence from Sweden," Papers in Innovation Studies 2024/11, Lund University, CIRCLE - Centre for Innovation Research.
    6. Sargent, Kristina, 2024. "Unpacking migration costs: Heterogeneous effects in EU labor markets," Economic Modelling, Elsevier, vol. 139(C).
    7. repec:cam:camjip:2235 is not listed on IDEAS
    8. Nezih Guner & Alessandro Ruggieri, 2021. "Misallocation and inequality," Discussion Papers 2021/01, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    9. Guido Menzio, 2023. "Optimal Product Design: Implications for Competition and Growth Under Declining Search Frictions," Econometrica, Econometric Society, vol. 91(2), pages 605-639, March.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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