Occupations, Skills and Barriers to Labor Reallocation

Georg Duernecker and Berthold Herrendorf

No 1323, 2018 Meeting Papers from Society for Economic Dynamics

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.

Date: 2018
New Economics Papers: this item is included in nep-dge, nep-eur and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:1323

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