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Sectoral Reallocation, Employment and Earnings Over the Business Cycle


  • Ludo Visschers

    (The University of Edinburgh/Universidad)

  • David Wiczer

    (FRB St. Louis)

  • Carlos Carrillo-Tudela



Recessions change job flows, increasing unemployment risk, reducing job-finding rates, and occupational switching rates among those still changing jobs. This article connects these cyclical differences in job flows to differences in the earnings change distribution across the cycle. The connection is natural because earnings change much larger when a worker experiences a job change and even larger when switching occupation. First, we present a statistical analysis of the contribution from (a) the change in the incidence of occupation and job change and (b) the change in the ``return'' to these changes. Then, because job and occupation switching is endogenous we look through the lens of a business cycle model with on-the-job search and occupational mobility.

Suggested Citation

  • Ludo Visschers & David Wiczer & Carlos Carrillo-Tudela, 2016. "Sectoral Reallocation, Employment and Earnings Over the Business Cycle," 2016 Meeting Papers 1648, Society for Economic Dynamics.
  • Handle: RePEc:red:sed016:1648

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