Cyclical Occupational Choice in a Model with Rational Wage Expectations and Perfect Occupational Mobility
In many professional labor markets the number of new workers follows a cyclical time path. This phenomenon is usually explained by means of a cobweb model that is based on the assumptions of myopic wage expectations and occupational immobility. Since both assumptions are questioned by the empirical literature, we develop an alternative model that is based on the assumptions of rational wage expectations and perfect occupational mobility. Depending on the production function, the model can generate cycles in the number of workers who enter a professional labor market.
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NBER Working Papers
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- Freeman, Richard B, 1975. "Legal "Cobwebs": A Recursive Model of the Market for New Lawyers," The Review of Economics and Statistics, MIT Press, vol. 57(2), pages 171-79, May.
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University of Chicago Press, vol. 87(5), pages S7-36, October.
- Borsch-Supan, Axel, 1990. "Education and its double-edged impact on mobility," Economics of Education Review, Elsevier, vol. 9(1), pages 39-53, March.
- Dolton, Peter J & Kidd, Michael P, 1998. "Job Changes, Occupational Mobility and Human Capital Acquisition: An Empirical Analysis," Bulletin of Economic Research, Wiley Blackwell, vol. 50(4), pages 265-95, October.
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