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Jacks of All Trades and Masters of One: Declining Search Frictions and Unequal Growth

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  • Paolo Martellini
  • Guido Menzio

Abstract

Declining search frictions generate productivity growth by allowing workers to find jobs for which they are better suited. The return of declining search frictions on productivity varies across different types of workers. For workers who are “jacks of all trades”—in the sense that their productivity is nearly independent from the distance between their skills and the requirements of their job’ declining search frictions lead to minimal productivity growth. For workers who are “masters of one trade”—in the sense that their productivity is very sensitive to the gap between their individual skills and the requirements of their job—declining search frictions lead to fast productivity growth. As predicted by this view, we find that workers in routine occupations have low wage dispersion and growth, while workers in non-routine occupations have high wage dispersion and growth.

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  • Paolo Martellini & Guido Menzio, 2020. "Jacks of All Trades and Masters of One: Declining Search Frictions and Unequal Growth," NBER Working Papers 27758, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27758
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    Cited by:

    1. Guido Menzio, 2023. "Optimal Product Design: Implications for Competition and Growth Under Declining Search Frictions," Econometrica, Econometric Society, vol. 91(2), pages 605-639, March.
    2. Freund, L. B., 2022. "Superstar Teams," Cambridge Working Papers in Economics 2276, Faculty of Economics, University of Cambridge.
    3. Nezih Guner & Alessandro Ruggieri, 2021. "Misallocation and inequality," Discussion Papers 2021/01, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    4. Xiao, Jing & Lindholm Dahlstrand, Åsa, 2024. "Acqui-hiring and deep-tech ventures: Evidence from Sweden," Papers in Innovation Studies 2024/11, Lund University, CIRCLE - Centre for Innovation Research.
    5. Griffy, Benjamin & Rabinovich, Stanislav, 2023. "Worker selectivity and fiscal externalities from unemployment insurance," European Economic Review, Elsevier, vol. 156(C).
    6. Piotr Denderski & Florian Sniekers, 2024. "Declining Search Frictions, Unemployment and Self-Employment," The Economic Journal, Royal Economic Society, vol. 134(659), pages 1100-1145.
    7. Sargent, Kristina, 2024. "Unpacking migration costs: Heterogeneous effects in EU labor markets," Economic Modelling, Elsevier, vol. 139(C).

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    More about this item

    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
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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