IDEAS home Printed from https://ideas.repec.org/a/wly/econjl/v128y2018i609p652-682.html

Human Capital and Unemployment Dynamics: Why More Educated Workers Enjoy Greater Employment Stability

Author

Listed:
  • Isabel Cairó
  • Tomaz Cajner

Abstract

Why do more educated workers experience lower unemployment rates and lower employment volatility? Empirically, these workers have similar job finding rates but much lower and less volatile separation rates than their less educated peers. We argue that on†the†job training, being complementary to formal education, is the reason for this pattern. Using a search and matching model with endogenous separations, we show that investments in match†specific human capital reduce incentives to separate but leave the job finding rate essentially unaffected. The model generates unemployment dynamics quantitatively consistent with the data. Finally, we provide novel empirical evidence supporting the mechanism studied in the article.

Suggested Citation

  • Isabel Cairó & Tomaz Cajner, 2018. "Human Capital and Unemployment Dynamics: Why More Educated Workers Enjoy Greater Employment Stability," Economic Journal, Royal Economic Society, vol. 128(609), pages 652-682, March.
    • Handle: RePEc:wly:econjl:v:128:y:2018:i:609:p:652-682
    DOI: 10.1111/ecoj.12441
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecoj.12441
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecoj.12441?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
    ---><---

    Other versions of this item:

    More about this item

    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    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:wly:econjl:v:128:y:2018:i:609:p:652-682. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    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.