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Author: John R. Grigsby
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This paper studies aggregate labor market dynamics when workers have heterogeneous skills for tasks which are subject to non-uniform labor demand shocks. When workers have different skills, movements in aggregate wages partly reflect a reallocation of different workers across tasks and into employment. This ensures that there nearly always exists some combination of task-specific demand shocks that induce aggregate employment and wages to negatively comove even in a frictionless economy. Furthermore, such reallocations would be interpreted either as a labor wedge or as a shift in an aggregate labor supply curve in representative agent economies. Developing a method to estimate the multidimensional skill distribution, I show that a frictionless model with realistic heterogeneity can replicate the mean wage increase and employment collapse of the Great Recession. Reduced-form composition-adjustment methods recover positive co-movements between employment and wages in recent periods suggesting an increasing role for composition effects through time, which the model rationalizes through changes in the skill distribution and composition of sectoral shocks.
Author: John R. Grigsby
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper studies aggregate labor market dynamics when workers have heterogeneous skills for tasks which are subject to non-uniform labor demand shocks. When workers have different skills, movements in aggregate wages partly reflect a reallocation of different workers across tasks and into employment. This ensures that there nearly always exists some combination of task-specific demand shocks that induce aggregate employment and wages to negatively comove even in a frictionless economy. Furthermore, such reallocations would be interpreted either as a labor wedge or as a shift in an aggregate labor supply curve in representative agent economies. Developing a method to estimate the multidimensional skill distribution, I show that a frictionless model with realistic heterogeneity can replicate the mean wage increase and employment collapse of the Great Recession. Reduced-form composition-adjustment methods recover positive co-movements between employment and wages in recent periods suggesting an increasing role for composition effects through time, which the model rationalizes through changes in the skill distribution and composition of sectoral shocks.
Author: Mr.Eswar Prasad
Publisher: International Monetary Fund
ISBN: 1451854439
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
This paper extends the equilibrium business cycle framework to incorporate ex ante skill heterogeneity among workers. Consistent with the empirical evidence, skilled and unskilled workers in the model face the same degree of cyclical variation in real wages although unskilled workers are subject to substantially higher procyclical variation in employment. Systematic cyclical changes in the average skill level of employed workers are shown to induce bias in aggregate measures of cyclical variation in the labor input, productivity, and the real wage. The introduction of skill heterogeneity improves the model’s ability to match the empirical correlation between total hours and the real wage but the correlation between total hours and labor productivity remains higher than in the data.
Author: Brendan Epstein
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Xiaoxue Song
Publisher:
ISBN:
Category : Human capital
Languages : en
Pages : 0
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My dissertation consists of three chapters studying the heterogeneity in the labor market. Chapter 1 studies the by-age employment heterogeneity in response to technology shocks. Chapter 2 studies the by-age labor force participation heterogeneity in response to macroeconomic shocks. Chapter 3 studies the effect of monetary policy on the employment of occupations with different levels of routine task intensity. A central question in macroeconomics is how employment changes in response to technological progress. In Chapter 1, I broaden this question by investigating if there exist age-specific effects. I use the mixed autoregression (MAR) model to explicitly model the employment to population ratio as a function of age. The results show the responses of young and old employment ratios are much more negative than prime-age, and the response of the young is three times lower than that of the old. Moreover, the forecast error variance decomposition results show that technology shocks' contribution decreases by age. The labor force participation rate is weakly procyclical, as opposed to employment, which is strongly procyclical. Therefore, labor force participation is mostly assumed to be constant in the literature. However, the young, prime-age, and old participation rates are heterogeneous in cyclicality and volatility. In Chapter 2, I study the heterogeneity in the participation of 16-65 old in response to important macroeconomic shocks. I extend the identification scheme in the MAR model from zero to sign restrictions, which enable me to include labor market shocks important for explaining participation rate fluctuations. The results show that young, prime-age, and old participation rates respond differently to the technology, demand, labor supply, and wage bargaining shocks.Routine occupation employment share has decreased, while non-routine occupation employment share has increased since the 1980s. This trend of job polarization has been contributing to the growth in wage inequality in the US. In Chapter 3, I study the effect of a contractionary monetary policy shock on occupational employment with different levels of routine task inputs in a MAR model. I show that routine occupation groups' employment, especially those with higher offshorability, are disproportionally affected by a contractionary monetary policy shock.
Author: Pawel Michal Krolikowski
Publisher:
ISBN:
Category :
Languages : en
Pages : 55
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This paper disciplines a model with search over match quality using microeconomic evidence on worker mobility patterns and wage dynamics. In addition to capturing these individual data, the model provides an explanation for aggregate labor market patterns. Poor match quality among first jobs implies large fluctuations in unemployment due to a responsive job destruction margin. Endogenous job destruction generates a burst of layoffs at the onset of a recession and, together with on-the-job search, generates a negative comovement between unemployment and vacancies. A significant job ladder, consistent with the empirical wage dispersion, provides ample scope for the propagation of vacancies and unemployment.
Author: Rebecca Riley
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Opportunities facing skilled and unskilled workers diverged over the last quarter of the twentieth century in the UK. We develop an empirical framework consistent with these trends that highlights the importance of skill heterogeneity in both wage setting and labour demand in explaining aggregate labour market outcomes. The framework enables us to quantify the macroeconomic effects of shocks that impact particularly on one group rather than another.
Author: Jongsuk Han
Publisher:
ISBN:
Category : Employability
Languages : en
Pages : 117
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"My research focuses on how labor market dynamics are different across ability. In this dissertation, I explore the impact of individual ability on the cyclicality of employment rates over the business cycle and non-employment duration. Then I provide a human capital model with learning-by-doing and heterogeneous learning ability to explain the differences in observed labor market dynamics across ability. In chapter one, I discuss the Armed Forces Qualification Test as a measure of ability. Then, I provide some empirical evidence which shows that high ability workers are more attached to the labor market than low ability workers. Data from the National Longitudinal Survey of Youth 1979 shows that high ability workers have higher employment rates, less pro-cyclical employment rates, and shorter non-employment duration than low ability workers. At the same time, workers with high ability have higher wage levels and wage growth rates than low ability workers. I suggest that a human capital model with learning-by-doing and heterogeneous learning ability can explain high labor supply from high ability workers, because current labor supply increases future human capital which delivers higher labor income in the future. In the second chapter, I empirically document that employment rates of high ability workers are less volatile than those of low ability workers over the business cycle. Less pro-cyclical employment rates for high ability workers remains even after controlling for education and average life-time wage. Moreover, the impact of ability on employment cyclicality decreases over the life cycle. In order to explain my empirical findings, I provide a life-cycle model with human capital accumulation through learning-by-doing. Heterogenous learning ability is introduced into the model to generate different wage profiles across ability. In this model, high ability workers can accumulate more human capital than low ability workers during any given period of employment. Therefore, high ability workers have more incentive to provide their labor than low ability workers because they can have higher return in the next period by accumulating more human capital. In the recession, all workers reduce their labor supply because the aggregate productivity falls. However, high ability workers decreases labor supply much less than low ability workers because working in the current period increases their future human capital. I calibrate the model to match employment and wage profiles over experience. Then, an aggregate productivity shock is introduced into the model to perform the business cycle analysis. The simulated data mimics the observed pattern in the data. In the last chapter, I explore the duration difference across ability groups instead of the incidence of employment. I find that high ability workers experience shorter non-employment duration than low ability worker even after conditioning on education and average life-time wage. I test whether the main reason of short non-employment duration for high ability workers is induced by low propensity to change their previous occupation, industry, or employer. Although workers who do not change occupation, industry, or employer have much shorter non-employment duration than workers who find new jobs in different sectors, the ability effect on non-employment duration is not generated by this sorting mechanism. Lastly, I build a human capital model with learning-by-doing and heterogeneous learning ability. Since high ability workers accumulate more human capital than low ability workers during the same employment period, high ability workers have a lower reservation wage conditional on current human capital stock. Hence, high ability workers are more likely to accept the wage offer than low ability workers after separation. I calibrate the model to match employment and wage profiles and average non-employment duration simultaneously. The calibrated model can qualitatively reproduce short non-employment duration for high ability workers"--Pages v-vii.
Author: José Mustre-del-Río
Publisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 214
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"Economists often analyze economies populated by identical agents due to their tractability. However, this practice leads to discrepancies between individual and aggregate level observations. Most prominently, these models overlook large differences in behavior and outcomes across workers. This dissertation fills this gap by examining the implications of individual employment and turnover patterns for the aggregate labor market. The first chapter of this dissertation analyzes turnover differences across workers over the business cycle and their implications for overall job duration. Evidence from the National Longitudinal Survey of The Youth (NLSY) 1979-2006 suggests that average (overall) job duration is pro-cyclical, once controlling for worker composition. At the exit margin, jobs ending in recessions are of systematically shorter duration than jobs ending in booms. This result however is driven by high turnover workers who disproportionately account for exits in a recession. At the entry margin, jobs starting in recessions are expected to be of shorter duration. This result is not compositional. Recessions tend to increase the likelihood of any new job ending even when accounting for worker heterogeneity. The second chapter of this dissertation explores the implications of individual labor supply heterogeneity for the aggregate labor supply elasticity. It presents a heterogeneous agent economy with indivisible labor where agents differ in their disutility of labor and market skills. The model is estimated via indirect inference using observations on average employment and wage rates across individuals in the NLSY. The elasticity of aggregate employment in the model is 0.71, which is low compared to the literature. The results suggest that the previous literature generates large aggregate labor supply elasticities by ignoring individual labor supply differences. The third chapter is a natural extension of the second. It addresses what are the resulting aggregate employment fluctuations in an economy where agents differ in their labor supply. The results of this chapter suggest that allowing for individual labor supply heterogeneity has profound cyclical effects. The model predicts that aggregate employment fluctuations are small because individuals with very inelastic labor supply contribute disproportionately to overall employment over the business cycle"--Leaves v-vi.
Author: Solomon W. Polachek
Publisher: Emerald Group Publishing
ISBN: 1787143783
Category : Business & Economics
Languages : en
Pages : 476
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Book Description
This volume contains original research articles which analyze the linkages between education and skills and the causes and consequences of different types of skill mismatch. The volume yields new insights regarding overeducation, underskilling, graduate jobs, wages returns to skills, aggregate productivity, job complexity and skill development.
Author: Orhun Sevinc
Publisher:
ISBN:
Category :
Languages : en
Pages :
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