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The dynamic of job competition during the ICT revolution

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  • Cheron, Arnaud
  • Langot, François
  • Moreno-Galbis, Eva

Abstract

Our paper seeks to gain insights on the e®ect of labor market institutions on the evolution of overeducation (job competition), unemployment inequalities and job instability during the polarization process of the labor market fostered by the di®usion of novel technologies. Based on micro data, we ¯rst present some stylized facts characterizing the occidental countries' labor markets. We then develop an endogenous job destruction framework µa la Mortensen and Pissarides (1994) where each individual is endowed with a given ability level. The process of contact between the set of heterogeneous workers and ¯rms is represented by a traditional matching function. The segmentation of the labor market between workers having the required ability to occupy cognitive jobs (where novel technologies are used) and the rest of the workers occupying simple jobs is endogenously determined. Firms o®ering a cognitive job support a set up cost but ICT are assumed to improve their productivity. When simulated the model manages to reproduce the U-shaped path followed by the ability requirements needed in cognitive positions as ICT got increasingly di®used. Furthermore, we also draw conclusions concerning the evolution of job stability, the size of each labor market segment and the unemployment rates.

Suggested Citation

  • Cheron, Arnaud & Langot, François & Moreno-Galbis, Eva, 2007. "The dynamic of job competition during the ICT revolution," CEPREMAP Working Papers (Docweb) 0702, CEPREMAP.
    • Handle: RePEc:cpm:docweb:0702
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    References listed on IDEAS

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    2. Sébastien Bock, 2018. "Job Polarization and Unskilled Employment Losses in France," PSE Working Papers halshs-01513037, HAL.

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    More about this item

    Keywords

    technological change; overeducation; job turnover; heterogeneous agents;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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