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Inter-industry labor reallocation and task distance

Author

Listed:
  • Ayako Kondo

    (Yokohama National University)

  • Saori Naganuma

    (Bank of Japan)

Abstract

This paper investigates the factors preventing inter-industry labor reallocation by estimating the determinants of inter-industry worker flow and earnings change after a job change. We find that the difference in required tasks is an important reason for reduction in earnings after an inter-industry job change, and the fear of earnings losses may prevent workers from moving to industries requiring a different set of tasks. Also, more workers switch to industries with which their previous industry had larger transactions, although it affects earnings changes only marginally. On the other hand, industry performance does not affect labor inflow or wage changes significantly for inter-industry job changes. Furthermore, earnings loss associated with a move to a distant industry is not necessarily smaller for workers who are relatively more likely to move to a distant industry.

Suggested Citation

  • Ayako Kondo & Saori Naganuma, 2014. "Inter-industry labor reallocation and task distance," Bank of Japan Working Paper Series 14-E-8, Bank of Japan.
    • Handle: RePEc:boj:bojwps:wp14e08
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    Cited by:

    1. Gaston, Noel & Yoshimi, Taiyo, 2023. "The Balassa-Samuelson model with job separations," Japan and the World Economy, Elsevier, vol. 65(C).
    2. Kondo, Ayako & Naganuma, Saori, 2015. "Inter-industry labor reallocation and task distance," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 127-147.
    3. Naoko Hara & Munechika Katayama & Ryo Kato, 2014. "Rising Skill Premium?: The Roles of Capital-Skill Complementarity and Sectoral Shifts in a Two-Sector Economy," Bank of Japan Working Paper Series 14-E-9, Bank of Japan.
    4. Ichiro Fukunaga & Kakuho Furukawa & Shunsuke Haba & Yoshihiko Hogen & Yosuke Kido & Tomohiro Okubo & Kotaro Suita & Kosuke Takatomi, 2023. "Wage Developments in Japan: Four Key Issues for the Post-COVID-19 Wage Growth," Bank of Japan Working Paper Series 23-E-4, Bank of Japan.

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    Keywords

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    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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