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Occupations, Skills and Barriers to Labor Reallocation

Author

Listed:
  • Georg Duernecker

    (University of Munich)

  • Berthold Herrendorf

    (Arizona State University)

Abstract

We study the role that barriers to entry into occupations play for the reallocation of labor across sectors and for hours worked in the market in the US and Germany. We document that relative to the US, Germany has stricter degree requirements in many occupations and has lower employment shares in occupations in which it has stricter education requirements. We quantify the implications of such barriers to entry into occupation for labor market outcomes in an overlapping-generations model in which individuals choose their sector and occupation. We calibrate the model to match the US structural transformation and the changes in the distribution of the employment shares of occupations. We then feed the stricter German degree requirements into the otherwise unchanged model. We find that as a result Germans in the model work considerably fewer hours than Americans in the service sector in particular and in the market in general.

Suggested Citation

  • Georg Duernecker & Berthold Herrendorf, 2018. "Occupations, Skills and Barriers to Labor Reallocation," 2018 Meeting Papers 1323, Society for Economic Dynamics.
  • Handle: RePEc:red:sed018:1323
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