Labor Market Fluidity and Human Capital Accumulation

Niklas Engbom

No 29698, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using panel data from 23 OECD countries, I document that wages grow more over the life-cycle in countries where job-to-job mobility is more common. A life-cycle theory of job shopping and accumulation of skills on the job highlights that a more fluid labor market allows workers to faster relocate to jobs where they can better use their skills, incentivizing accumulation of skills. Lower labor market fluidity reduces life-cycle wage growth by 20 percent and aggregate labor productivity by nine percent across the OECD relative to the US. I derive a set of testable predictions for training and confront them with comparable cross-country training data, finding support for the theory.

JEL-codes: E24 J24 (search for similar items in EconPapers)
Date: 2022-01
New Economics Papers: this item is included in nep-lma and nep-mac
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