IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2311.00777.html
   My bibliography  Save this paper

What is a Labor Market? Classifying Workers and Jobs Using Network Theory

Author

Listed:
  • Jamie Fogel
  • Bernardo Modenesi

Abstract

This paper develops a new data-driven approach to characterizing latent worker skill and job task heterogeneity by applying an empirical tool from network theory to large-scale Brazilian administrative data on worker--job matching. We microfound this tool using a standard equilibrium model of workers matching with jobs according to comparative advantage. Our classifications identify important dimensions of worker and job heterogeneity that standard classifications based on occupations and sectors miss. The equilibrium model based on our classifications more accurately predicts wage changes in response to the 2016 Olympics than a model based on occupations and sectors. Additionally, for a large simulated shock to demand for workers, we show that reduced form estimates of the effects of labor market shock exposure on workers' earnings are nearly 4 times larger when workers and jobs are classified using our classifications as opposed to occupations and sectors.

Suggested Citation

  • Jamie Fogel & Bernardo Modenesi, 2023. "What is a Labor Market? Classifying Workers and Jobs Using Network Theory," Papers 2311.00777, arXiv.org.
    • Handle: RePEc:arx:papers:2311.00777
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2311.00777
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    2. Hu, Yingyao, 2008. "Identification and estimation of nonlinear models with misclassification error using instrumental variables: A general solution," Journal of Econometrics, Elsevier, vol. 144(1), pages 27-61, May.
    3. Efraim Benmelech & Nittai K. Bergman & Hyunseob Kim, 2022. "Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages?," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 200-250.
    4. Schmutte, Ian M., 2014. "Free to Move? A Network Analytic Approach for Learning the Limits to Job Mobility," Labour Economics, Elsevier, vol. 29(C), pages 49-61.
    5. Ben Lipsius, 2018. "Labor Market Concentration does not Explain the Falling Labor Share," 2018 Papers pli1202, Job Market Papers.
    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. Jamie Fogel & Bernardo Modenesi, 2024. "Detailed Gender Wage Gap Decompositions: Controlling for Worker Unobserved Heterogeneity Using Network Theory," Papers 2405.04365, arXiv.org.

    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. Gregor Jarosch & Jan Sebastian Nimczik & Isaac Sorkin, 2024. "Granular Search, Market Structure, and Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(6), pages 3569-3607.
    2. Claudio Luccioletti, 2022. "Labor Market Power Across Cities," Working Papers wp2022_2214, CEMFI.
    3. Gregor Jarosch & Isaac Sorkin & Jan Sebastian Nimczik, 2019. "Granular Search, Concentration and Wages," 2019 Meeting Papers 1018, Society for Economic Dynamics.
    4. Steven Berry & Martin Gaynor & Fiona Scott Morton, 2019. "Do Increasing Markups Matter? Lessons from Empirical Industrial Organization," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 44-68, Summer.
    5. David Berger & Kyle Herkenhoff & Andreas R. Kostøl & Simon Mongey, 2024. "An Anatomy of Monopsony: Search Frictions, Amenities, and Bargaining in Concentrated Markets," NBER Macroeconomics Annual, University of Chicago Press, vol. 38(1), pages 1-47.
    6. Kevin Rinz, 2022. "Did Timing Matter? Life Cycle Differences in Effects of Exposure to the Great Recession," Journal of Labor Economics, University of Chicago Press, vol. 40(3), pages 703-735.
    7. Rudolf Winter-Ebmer & Jasmin Anderlik & Malika Jumaniyozova & Bernhard Schmidpeter, 2024. "Monopsony: Wages, wage bargaining and job requirements," Economics working papers 2024-15, Department of Economics, Johannes Kepler University Linz, Austria.
    8. Elizabeth Weber Handwerker & Matthew Dey, 2024. "Some facts about concentrated labor markets in the United States," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(2), pages 132-151, April.
    9. Kali, Raja & Liu, Andrew Yizhou, 2024. "Labor market power and worker turnover," European Economic Review, Elsevier, vol. 163(C).
    10. Salvanes, Kjell G & Dodini, Samuel & Willén, Alexander, 2021. "The Dynamics of Power in Labor Markets: Monopolistic Unions versus Monopsonistic Employers," CEPR Discussion Papers 16834, C.E.P.R. Discussion Papers.
    11. Marinescu, Ioana & Ouss, Ivan & Pape, Louis-Daniel, 2021. "Wages, hires, and labor market concentration," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 506-605.
    12. Brummund, Peter & Makowsky, Michael D., 2024. "Monopsony and Local Religious Clubs: Evidence from Indonesia," IZA Discussion Papers 16999, Institute of Labor Economics (IZA).
    13. Yue Qiu & Aaron Sojourner, 2023. "Labor-Market Concentration and Labor Compensation," ILR Review, Cornell University, ILR School, vol. 76(3), pages 475-503, May.
    14. Albert Jan Hummel, 2021. "Monopsony power, income taxation and welfare," Tinbergen Institute Discussion Papers 21-051/VI, Tinbergen Institute.
    15. Kahn, Matthew E. & Tracy, Joseph, 2024. "Monopsony in spatial equilibrium," Regional Science and Urban Economics, Elsevier, vol. 104(C).
    16. Jonathan Hambur, 2023. "Did Labour Market Concentration Lower Wages Growth Pre-COVID?," RBA Research Discussion Papers rdp2023-02, Reserve Bank of Australia.
    17. Salvanes, Kjell G & Dodini, Samuel & Lovenheim, Michael F. & Willén, Alexander, 2020. "Monopsony, Skills, and Labor Market Concentration," CEPR Discussion Papers 15412, C.E.P.R. Discussion Papers.
    18. Dodini, Samuel & Løken, Katrine & Willén, Alexander, 2022. "The Effect of Labor Market Competition on Firms, Workers, and Communities," Discussion Paper Series in Economics 17/2022, Norwegian School of Economics, Department of Economics.
    19. Vitor Costa, 2023. "Local Labor Market Effects of Mergers and Acquisitions in Developing Countries: Evidence from Brazil," Papers 2306.08797, arXiv.org.
    20. Brenčič, Vera, 2024. "Distribution of vacancies and new hires across employers: Implications for job offers, skill requirements, and employers’ search outcomes," Labour Economics, Elsevier, vol. 91(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:arx:papers:2311.00777. 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: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    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.