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The Changing Value of Employment and Its Implications

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  • Alonzo, Davide
  • Gallipoli, Giovanni

Abstract

We characterize the employment value of different worker-occupation matches and estimate the substitutability of match-specific inputs in production. In an equilibrium model of the U.S. labor market, we examine the responses of employment and wages to shifts in technology and match values. Earnings are mainly driven by technology while match value heterogeneity influences the distribution of workers across occupations. The model delivers measures of rents and compensating differentials. After 1980, employment rents increased for educated workers but stagnated for others. Compensating differentials have risen on average, particularly in occupations where worker mobility has grown.

Suggested Citation

  • Alonzo, Davide & Gallipoli, Giovanni, 2023. "The Changing Value of Employment and Its Implications," CEPR Discussion Papers 17943, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:17943
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    More about this item

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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