Essays on the allocation of jobs and workers
High rates of job and worker reallocation are seen in all countries, sectors and at all stages of the business cycle. This ongoing reallocation of resources is essential to the introduction of new products and production techniques, and impacts directly on the welfare of workers, requiring them to switch between employers and shuffle between employment and joblessness. It is also a major source of aggregate productivity growth, and therefore increasing living standards. The three essays in my dissertation discuss different aspects of this reallocation. The first chapter focuses on the transition of unemployed workers into employment. Negative duration dependence is observed in the rate at which workers leave unemployment in many labor markets. I argue that the stigmatization of individuals with long unemployment spells is potentially important in accounting for this duration dependence. When workers differ in ability, and employers cannot fully observe this ability, employers will condition their hiring decision on a potential employee's unemployment duration, thereby 'stigmatizing' individuals with long unemployment spells. The second chapter explores the substantial differences in the cyclical nature of job reallocation in different sectors and countries. Job reallocation is highly countercyclical in US manufacturing, and procyclical in many service sectors, and several western European countries. I argue that an important part of these differences is due to the extensive use of temporary layoffs in US manufacturing. To pursue this, I develop a (calibrated) model of permanent creation and destruction in which workers can be temporarily laid-off. The model reproduces the countercyclical reallocation pattern seen in manufacturing. However, permanent job reallocation is found to be procyclical, suggesting temporary layoffs account for a major part of the differences in the cyclical nature of reallocation. In my final chapter I develop a model of job and worker allocation in which workers differ in ability, jobs differ in their skill requirements, and employed workers can search. In this model there is endogenous wage inequality both within and between types of workers. As such, this model provides a convenient framework for analyzing factors that may been responsible for the significant increase in inequality over the last few decades.
Year of publication: |
2003-01-01
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Authors: | Porter, Nathaniel John |
Publisher: |
ScholarlyCommons |
Saved in:
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