Are Specific Skills an Obstacle to Labor Market Adjustment? Theory and an Application to the EU Enlargement
We argue that the existence of large amounts of specific human capital makes costly and slows down the adjustment in the labor market after large reallocation shocks. To illustrate this point we build a theoretical framework in which young agents' career is heavily determined by initial education, and analyze the transition to a new steady-state after a sectoral demand shift. An interesting case study is the EU enlargement, which led to modernization of many sectors in eastern countries and to a fast decline of traditional industries. Using labor force data from a large economy with rigid labor markets, Poland, and a small open economy with increased flexibility, Estonia, we document and find support for our claim. Quantitative exercises suggest that the overspecializaton of the labor force in Poland explain to a large extent the much higher and persistent unemployment compared to Estonia during the period of EU enlargement
Year of publication: |
[2021]
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Authors: | Lamo, Ana ; Messina, Julián ; Wasmer, Etienne |
Publisher: |
[S.l.] : SSRN |
Subject: | EU-Mitgliedschaft | EU membership | Arbeitsmarkt | Labour market | Polen | Poland | Arbeitsteilung | Division of labour | Estland | Estonia | Systemtransformation | Economic transition | Wirtschaftliche Anpassung | Economic adjustment | Qualifikation | Occupational qualification |
Saved in:
freely available
Extent: | 1 Online-Ressource (59 p) |
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Series: | ECB Working Paper ; No. 585 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 2006 erstellt |
Other identifiers: | 10.2139/ssrn.878684 [DOI] |
Classification: | J30 - Wages, Compensation, and Labor Costs. General |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013318030
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