IDEAS home Printed from https://ideas.repec.org/a/eee/jetheo/v174y2018icp184-223.html
   My bibliography  Save this article

Large firms and within firm occupational reallocation

Author

Listed:
  • Papageorgiou, Theodore

Abstract

This paper considers the equilibrium interaction between within firm and across firm reallocation in the presence of labor market frictions. While a sizable literature has investigated frictional labor markets, it has ignored within firm mobility. Nonetheless, every year a sizable fraction of workers switch occupations without changing firms. Employees in large firms can sample from a larger selection and across firm mobility is replaced by within firm mobility. Bringing together within and across firm reallocation along with labor market frictions, naturally accounts for the observed differences in worker flows and wages across firms of different sizes.

Suggested Citation

  • Papageorgiou, Theodore, 2018. "Large firms and within firm occupational reallocation," Journal of Economic Theory, Elsevier, vol. 174(C), pages 184-223.
  • Handle: RePEc:eee:jetheo:v:174:y:2018:i:c:p:184-223
    DOI: 10.1016/j.jet.2017.12.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0022053117301448
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jet.2017.12.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Giuseppe Moscarini & Fabien Postel-Vinay, 2013. "Stochastic Search Equilibrium," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1545-1581.
    2. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 79-119.
    3. Ian E. Novos, 1992. "Learning by doing and adverse selection : the importance of commitment," Finnish Economic Papers, Finnish Economic Association, vol. 5(2), pages 79-90, Autumn.
    4. Pierre Cahuc & Fabien Postel-Vinay & Jean-Marc Robin, 2006. "Wage Bargaining with On-the-Job Search: Theory and Evidence," Econometrica, Econometric Society, vol. 74(2), pages 323-364, March.
    5. Li, Fei & Tian, Can, 2013. "Directed search and job rotation," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1268-1281.
    6. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    7. Leo Kaas & Philipp Kircher, 2015. "Efficient Firm Dynamics in a Frictional Labor Market," American Economic Review, American Economic Association, vol. 105(10), pages 3030-3060, October.
    8. Carrillo-Tudela, Carlos & Kaas, Leo, 2015. "Worker mobility in a search model with adverse selection," Journal of Economic Theory, Elsevier, vol. 160(C), pages 340-386.
    9. Aspen Gorry & Devon Gorry & Nicholas Trachter, 2019. "Learning And Life Cycle Patterns Of Occupational Transitions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(2), pages 905-937, May.
    10. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8grh35j2 is not listed on IDEAS
    11. Fernando Alvarez & Robert Shimer, 2011. "Search and Rest Unemployment," Econometrica, Econometric Society, vol. 79(1), pages 75-122, January.
    12. Gervais, Martin & Jaimovich, Nir & Siu, Henry E. & Yedid-Levi, Yaniv, 2016. "What should I be when I grow up? Occupations and unemployment over the life cycle," Journal of Monetary Economics, Elsevier, vol. 83(C), pages 54-70.
    13. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Econometrica, Econometric Society, vol. 70(6), pages 2295-2350, November.
    14. Giuseppe Moscarini & Kaj Thomsson, 2007. "Occupational and Job Mobility in the US," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(4), pages 807-836, December.
    15. Carrillo-Tudela, Carlos & Visschers, Ludo, 2014. "Unemployment and Endogenous Reallocation over the Business Cycle," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-35, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
    17. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    18. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May.
    19. Pinheiro, Roberto & Visschers, Ludo, 2015. "Unemployment risk and wage differentials," Journal of Economic Theory, Elsevier, vol. 157(C), pages 397-424.
    20. Guido Menzio & Shouyong Shi, 2011. "Efficient Search on the Job and the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 468-510.
    21. Rothschild, Michael, 1974. "A two-armed bandit theory of market pricing," Journal of Economic Theory, Elsevier, vol. 9(2), pages 185-202, October.
    22. Lisa B. Kahn & Fabian Lange, 2014. "Employer Learning, Productivity, and the Earnings Distribution: Evidence from Performance Measures," Review of Economic Studies, Oxford University Press, vol. 81(4), pages 1575-1613.
    23. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-261, April.
    24. Carlos Carrillo‐Tudela & Ludo Visschers, 2023. "Unemployment and Endogenous Reallocation Over the Business Cycle," Econometrica, Econometric Society, vol. 91(3), pages 1119-1153, May.
    25. Fatih Guvenen & Burhan Kuruscu & Satoshi Tanaka & David Wiczer, 2020. "Multidimensional Skill Mismatch," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 210-244, January.
    26. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    27. Matthew S. Dey & Christopher J. Flinn, 2005. "An Equilibrium Model of Health Insurance Provision and Wage Determination," Econometrica, Econometric Society, vol. 73(2), pages 571-627, March.
    28. Mathieu Taschereau-Dumouchel, 2020. "The Union Threat," Review of Economic Studies, Oxford University Press, vol. 87(6), pages 2859-2892.
    29. Schmidt, Christoph M & Zimmermann, Klaus F, 1991. "Work Characteristics, Firm Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 705-710, November.
    30. Lisa B. Kahn, 2013. "Asymmetric Information between Employers," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 165-205, October.
    31. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    32. Kate Antonovics & Limor Golan, 2012. "Experimentation and Job Choice," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 333-366.
    33. Fane Groes & Philipp Kircher & Iourii Manovskii, 2015. "The U-Shapes of Occupational Mobility," Review of Economic Studies, Oxford University Press, vol. 82(2), pages 659-692.
    34. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
    35. Dale T. Mortensen, 1978. "Specific Capital, Bargaining, and Labor Turnover," Discussion Papers 320, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    36. Joshua C. Pinkston, 2009. "A Model of Asymmetric Employer Learning with Testable Implications," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 367-394.
    37. repec:hal:spmain:info:hdl:2441/dc0ckec3fcb29ms9850c12h1p is not listed on IDEAS
    38. Bruce C. Greenwald, 1986. "Adverse Selection in the Labour Market," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 325-347.
    39. Novos, Ian E., 1992. "Learning by doing, adverse selection and firm structure," Journal of Economic Behavior & Organization, Elsevier, vol. 19(1), pages 17-39, September.
    40. Pietro Garibaldi & Espen Moen & Dag-Einar Sommervoll, 2016. "Competitive On-the-job Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 19, pages 88-107, January.
    41. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-273, May.
    42. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    43. Elena Pastorino, 2015. "Job Matching Within And Across Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56, pages 647-671, May.
    44. Theodore Papageorgiou, 2011. "Worker Sorting and Agglomeration Economies," 2011 Meeting Papers 660, Society for Economic Dynamics.
    45. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    46. Gueorgui Kambourov & Iourii Manovskii, 2008. "Rising Occupational And Industry Mobility In The United States: 1968-97," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 41-79, February.
    47. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Mobility and Wage Inequality," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 731-759.
    48. Moen, Espen R, 1997. "Competitive Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 385-411, April.
    49. John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2013. "Who Creates Jobs? Small versus Large versus Young," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 347-361, May.
    50. Idson, Todd L & Feaster, Daniel J, 1990. "A Selectivity Model of Employer-Size Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 99-122, January.
    51. Jean-Marc Robin & Fabien Postel-Vinay & Francis Kramarz, 2014. "Occupational Mobility and Wage Dynamics Within and Between Firms," 2014 Meeting Papers 168, Society for Economic Dynamics.
    52. Theodore Papageorgiou, 2014. "Learning Your Comparative Advantages," Review of Economic Studies, Oxford University Press, vol. 81(3), pages 1263-1295.
    53. Dale T. Mortensen, 1978. "Specific Capital and Labor Turnover," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 572-586, Autumn.
    54. Giuseppe Moscarini, 2005. "Job Matching and the Wage Distribution," Econometrica, Econometric Society, vol. 73(2), pages 481-516, March.
    55. repec:hal:spmain:info:hdl:2441/dc0ckec3fcb29ms985085gkbp is not listed on IDEAS
    56. repec:hal:spmain:info:hdl:2441/22qd4iha9ql84kd2t534hdeb is not listed on IDEAS
    57. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chatt, Robert & Gustafson, Matthew & Welker, Adam, 2021. "Firing frictions and the U.S. mergers and acquisitions market," Journal of Banking & Finance, Elsevier, vol. 128(C).
    2. Karin Mayr-Dorn, 2019. "Does digitalization increase labor market efficiency? Job search and effort on the job with asymmetric information and firm learning," Economics working papers 2019-06, Department of Economics, Johannes Kepler University Linz, Austria.
    3. Karin Mayr‐Dorn, 2023. "Adverse Selection, Learning, And Competitive Search," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 129-153, February.
    4. Stephen Ross Yeaple, 2017. "The Innovation Activities of Multinational Enterprises and the Demand for Skilled-Worker, Nonimmigrant Visas," NBER Chapters, in: High-Skilled Migration to the United States and Its Economic Consequences, pages 41-69, National Bureau of Economic Research, Inc.
    5. Giuseppe Moscarini, 2023. "Comment on "An Anatomy of Monopsony: Search Frictions, Amenities and Bargaining in Concentrated Markets"," NBER Chapters, in: NBER Macroeconomics Annual 2023, volume 38, National Bureau of Economic Research, Inc.
    6. Gueorgui Kambourov & Iourii Manovskii & Miana Plesca, 2020. "Occupational mobility and the returns to training," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(1), pages 174-211, February.
    7. Cici, Gjergji & Hendriock, Mario & Kempf, Alexander, 2018. "The impact of labor mobility restrictions on managerial actions: Evidence from the mutual fund industry," CFR Working Papers 18-01, University of Cologne, Centre for Financial Research (CFR).
    8. Cici, Gjergji & Hendriock, Mario & Kempf, Alexander, 2022. "Finding your calling: Matching skills with jobs in the mutual fund industry," CFR Working Papers 19-05, University of Cologne, Centre for Financial Research (CFR), revised 2022.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carlos Carrillo‐Tudela & Ludo Visschers, 2023. "Unemployment and Endogenous Reallocation Over the Business Cycle," Econometrica, Econometric Society, vol. 91(3), pages 1119-1153, May.
    2. Theodore Papageorgiou, 2022. "Occupational Matching and Cities," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(3), pages 82-132, July.
    3. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2010. "Inequality and Unemployment in a Global Economy," Econometrica, Econometric Society, vol. 78(4), pages 1239-1283, July.
    4. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," American Economic Review, American Economic Association, vol. 101(7), pages 2873-2898, December.
    5. Christian vom Lehn & Cache Ellsworth & Zachary Kroff, 2022. "Reconciling Occupational Mobility in the Current Population Survey," Journal of Labor Economics, University of Chicago Press, vol. 40(4), pages 1005-1051.
    6. Fatih Guvenen & Burhan Kuruscu & Satoshi Tanaka & David Wiczer, 2020. "Multidimensional Skill Mismatch," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 210-244, January.
    7. Theodore Papageorgiou, 2020. "Occupational Matching and Cities," Working Papers 2020-049, Human Capital and Economic Opportunity Working Group.
    8. Leo Kaas & Philipp Kircher, 2015. "Efficient Firm Dynamics in a Frictional Labor Market," American Economic Review, American Economic Association, vol. 105(10), pages 3030-3060, October.
    9. Rogerson, Richard & Shimer, Robert, 2011. "Search in Macroeconomic Models of the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 7, pages Pages: 61, Elsevier.
    10. Ronald P. Wolthoff, 2010. "Applications and Interviews: A Structural Analysis of Two-Sided Simultaneous Search," Working Papers tecipa-418, University of Toronto, Department of Economics.
    11. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    12. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 11, pages 973-1041, Elsevier.
    13. Giuseppe Moscarini & Fabien Postel-Vinay, 2013. "Stochastic Search Equilibrium," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1545-1581.
    14. Rune Vejlin & Gregory F. Veramendi, 2023. "Sufficient statistics for frictional wage dispersion and growth," Quantitative Economics, Econometric Society, vol. 14(3), pages 935-979, July.
    15. Violante, Giovanni & Hornstein, Andreas, 2006. "Frictional Wage Dispersion in Search Models: A Quantitative Approach," CEPR Discussion Papers 5935, C.E.P.R. Discussion Papers.
    16. Niklas Engbom & Christian Moser, 2022. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," American Economic Review, American Economic Association, vol. 112(12), pages 3803-3847, December.
    17. Shintaro Yamaguchi, 2010. "Job Search, Bargaining, and Wage Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 595-631, July.
    18. Carrillo-Tudela, Carlos & Hobijn, Bart & She, Powen & Visschers, Ludo, 2016. "The extent and cyclicality of career changes: Evidence for the U.K," European Economic Review, Elsevier, vol. 84(C), pages 18-41.
    19. Ryan Michaels & David Ratner & Michael Elsby, 2016. "Vacancy Chains," 2016 Meeting Papers 753, Society for Economic Dynamics.
    20. Carrillo-Tudela, Carlos & Kaas, Leo, 2015. "Worker mobility in a search model with adverse selection," Journal of Economic Theory, Elsevier, vol. 160(C), pages 340-386.
    21. Cahuc, Pierre, 2014. "Search, flows, job creations and destructions," Labour Economics, Elsevier, vol. 30(C), pages 22-29.

    More about this item

    Keywords

    Frictional labor markets; Occupational mobility; Within firm occupational reallocation; Firm size–wage premium; Separation rates;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:174:y:2018:i:c:p:184-223. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622869 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.