The Distributional Impacts of Worker Reallocation: Evidence from Europe

John Bluedorn, Francesca Caselli, Niels-Jakob Hansen, Ippei Shibata and Marina Tavares

No 2022/124, IMF Working Papers from International Monetary Fund

Abstract: Using individual-level data for 30 European countries between 1983 and 2019, we document the extent and earning consequences of workers’ reallocation across occupations and industries and how these outcomes vary with individual-level characteristics, namely (i) education, (ii) gender, and (iii) age. We find that while young workers are more likely to experience earnings gains with on-the-job sectoral and occupational switches, low-skilled workers’ employment transitions are associated with an earnings loss. These differences in earnings gains and losses also mask a high degree of heterogeneity related to trends in routinization. We find that workers, particularly low-skilled and older workers during recessions, experience a severe earning penalty when switching occupations from non-routine to routine occupations.

Keywords: Labor market mobility; Job transitions; Occupational mobility; Routinization; Business cycles; worker reallocation; routine occupation; earnings gain; earnings consequence; occupation transition; Economic recession; Wages; Unemployment; Unskilled labor; Europe (search for similar items in EconPapers)
Pages: 24
Date: 2022-06-24
New Economics Papers: this item is included in nep-eur and nep-tid
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