Learning and Labor Market Flows

Katarina Borovickova
Additional contact information
Katarina Borovickova: University of Chicago

No 652, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: I study labor market flows in an equilibrium model with a distinct role for firm- and worker- level uncertainty, and evaluate their contribution to the labor flows. Firms experience idiosyncratic productivity shocks to which the y react by adjusting the number of hired and separated workers. In addition, workers also switch jobs or leave their current firms for reasons related to the career development. Workers learn about their match quality while employed, build their careers through search for better job opportunities, and separate if they infer that their current job is not a good match. Firm-level productivity shocks impact the match quality of employed workers, which captures the idea that technology is partly embodied in workers and innovation can make some workers less suitable for the new technology. I use a large panel dataset of the labor market histories of individuals in Austria for the empirical investigation. I calibrate the model to match the aggregate labor market flows and show that the model generates dynamics which is consistent with the observed cross-sectional patterns for the job and worker flows. I use the calibrated model to evaluate the contribution of different mechanisms to the worker flows. The learning mechanism accounts for more than 50 percent of the flows which suggests that the uncertainty at the worker level plays an important role in explaining the large magnitude of the worker flows.

Date: 2012
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2012/paper_652.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed012:652

Access Statistics for this paper

More papers in 2012 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().