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Labor market polarization and international macroeconomic dynamics

Federico Mandelman ()

Journal of Monetary Economics, 2016, vol. 79, issue C, 1-16

Abstract: During the last thirty years, labor markets in advanced economies were characterized by their remarkable polarization. As job opportunities in middle-skill occupations disappeared, employment opportunities concentrated in the highest and lowest wage occupations. A two-country stochastic growth model that incorporates trade in tasks, rather than in goods, accounts for this evidence. This polarization did not result from a steady process: the relative employment share of each skill group significantly fluctuated over short to medium horizons. The aggregate shocks estimated within this framework can rationalize the observed skill-based employment dynamics, while providing a good fit to the macroeconomic data.

Keywords: Labor market polarization; International business cycles; Heterogeneous agents; Stochastic growth; Two-country models (search for similar items in EconPapers)
Date: 2016
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Working Paper: Labor market polarization and international macroeconomic dynamics (2013) Downloads
Working Paper: Labor Market Polarization and International Macroeconomic Dynamics (2013) Downloads
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DOI: 10.1016/j.jmoneco.2016.01.004

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