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The dynamic of job competition during the ICT revolution

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

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.

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Paper provided by CEPREMAP in its series CEPREMAP Working Papers (Docweb) with number 0702.

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Length: 50 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:cpm:docweb:0702
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  1. Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers W98/04, Institute for Fiscal Studies.
  2. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
  3. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
  4. James Albrecht & Susan Vroman, 2000. "A Matching Model with Endogenous Skill Requirements," Econometric Society World Congress 2000 Contributed Papers 0774, Econometric Society.
  5. Dale T. Mortensen & Christopher A. Pissarides, 1993. "Job Creation and Job Destruction in the Theory of Unemployment," CEP Discussion Papers dp0110, Centre for Economic Performance, LSE.
  6. Mortensen, Dale T & Pissarides, Christopher A, 1999. "Unemployment Responses to 'Skill-Biased' Technology Shocks: The Role of Labour Market Policy," Economic Journal, Royal Economic Society, vol. 109(455), pages 242-65, April.
  7. Gérard Forgeot & Jérôme Gautié, 1997. "Insertion professionnelle des jeunes et processus de déclassement," Économie et Statistique, Programme National Persée, vol. 304(1), pages 53-74.
  8. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Youth labour markets in Spain: Education, training, and crowding-out," European Economic Review, Elsevier, vol. 44(4-6), pages 943-956, May.
  9. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
  10. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," American Economic Review, American Economic Association, vol. 96(2), pages 189-194, May.
  11. Eric Maurin & David Thesmar, 2001. "Change in the Functional Structure of Firms and the Demand for Skill," Working Papers 2001-09, Centre de Recherche en Economie et Statistique.
  12. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
  13. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
  14. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
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