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Worker Reallocation Across Occupations: Confronting Data with Theory

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  • Etienne Lalé

Abstract

This paper studies the secular behavior of worker reallocation across occupations in the U.S. labor market. In the empirical analysis, we use microdata to construct consistent time series over a forty-five year period, and document that the fraction of employment reallocated annually across occupations is highly stable in the long run. We go beyond description and use an equilibrium model to identify potential changes in the productivity shocks and mobility costs that govern worker reallocation across occupations. We uncover the joint evolution of these factors by deriving a simple mapping between data and the model. Our analysis shows that constant reallocation rates across occupations mask slow-moving increases in the volatility of productivity shocks since the mid-1980s, and a pronounced upward shift in the cost of switching occupations in the period surrounding the Great Recession.

Suggested Citation

  • Etienne Lalé, 2015. "Worker Reallocation Across Occupations: Confronting Data with Theory," Bristol Economics Discussion Papers 15/657, School of Economics, University of Bristol, UK, revised 22 Oct 2016.
  • Handle: RePEc:bri:uobdis:15/657
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    Cited by:

    1. Ronald Bachmann & Peggy Bechara & Christina Vonnahme, 2020. "Occupational Mobility in Europe: Extent, Determinants and Consequences," De Economist, Springer, vol. 168(1), pages 79-108, March.
    2. repec:hal:spmain:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS
    3. Daniel Borowczyk-Martins & Etienne Lalé, 2016. "The Rise of Part-time Employment," Sciences Po publications 2016-04, Sciences Po.
    4. repec:hal:wpspec:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS

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    More about this item

    Keywords

    Occupations; Reallocation; Wages; Equilibrium Search.;
    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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