0000000000082184
AUTHOR
Damir Stijepic
An International Comparison of Skills, Traits and Job Mobility
Making use of an international survey that directly assesses the cognitive skills of the adult population, I document systematic differences in the effect of skills on job mobility across the 37 countries in the sample. While economic growth is associated with relatively higher job mobility among skilled workers, the prevalence of information and communication technology (ICT) in the workplace is associated with relatively lower job mobility. The documented patterns are in line with Schumpeterian growth models of creative destruction in which skilled workers transition to jobs with advanced technologies more easily.
Skills, Job Mobility and Productive Efficiency
Making use of a survey that directly assesses the participants’ cognitive skills, I study the relation between skills and job mobility in a large international comparison of 32 countries. Motivated by the canonical on-the-job search model, I measure job mobility by the ratio of the job-finding rate on the job to the transition rate into unemployment. A higher ratio of these rates induces, ceteris paribus, first-order stochastic dominance in the distribution of workers over jobs, indicating a more efficient allocation of resources across firms. On average across the 32 countries, a one-standard-deviation increase in numeracy skills is estimated to double the ratio of the job-finding rate on …
The Impact of the Productivity Dispersion Across Employers on the Labor's Income Share
In the present paper, I study the distribution of income across the factors of production within the canonical on-the-job search framework. I show that, by weakening the competition between employers, a mean-preserving spread of the employers' productivity distribution decreases the share of the production output that the workers receive. This result is particularly intriguing in light of the rising productivity dispersion and the declining labor share in many countries.
Employment Effects of Skills Around the World: Evidence from PIAAC
Making use of an international survey that directly assesses participants’ cognitive skills, I study the effect of skills on workers’ employment in 32 countries. On average, a one-standard-deviation increase in numeracy skills is associated with a 7.6 percentage points increase in the probability of being employed. Controlling for years spent in education, the employment effect of numeracy skills falls to 4.8 percentage points. Numeracy skills account for 30 percent of the 2.7 percentage points employment effect that is associated with years of education. There is considerable heterogeneity across both subgroups and countries.
Globalization, Worker Mobility and Wage Inequality
In the present paper, I integrate frictional labor markets with on-the-job search into an otherwise standard heterogeneous firm model of intra-industry trade. Most importantly, I show that the returns to workers’ inter-firm mobility are higher in a trade equilibrium than in autarky. Intuitively, by favoring large and productive firms, international trade amplifies the disparities in profitability between small and large firms. Hence, the returns to labor reallocation across firms rise. In view of the empirically observed higher inter-firm mobility among high-skill workers, this suggests a skill-biased impact of trade liberalization.
Trade Openness and the Skill Premium An Inverted - UU Relation?
Relying on linked employer–employee data from the German manufacturing sector in 1996–2010, I study the relation between the share of exporting establishments and the skill premium within narrowly defined industries. I document that the skill premium tends to be higher in industries with a larger share of exporting establishments. However, once unobserved industry heterogeneity is taken into account, the empirical evidence suggests an inverted-‘U’ relation between the share of exporting establishments and the skill premium.
Technology Diffusion, Worker Mobility and the Returns to Skill
In this paper I illustrate how the diffusion across firms of a skill-neutral technology leads to a skill-biased impact on the economy. The model identifies (i) differences in inter-firm mobility between skill groups, (ii) productivity dispersion across firms within industries, and (iii) differences in wages between small and large firms as key determinants of the skill premium. Calibrated to match differences in inter-firm mobility between skill groups and rising productivity dispersion across firms, the model ascribes one-third of the sharp increase in the skill premium in U.S. manufacturing from 1977 to 1997 to skill-neutral technical progress and the technology diffusion process itself. …
Plant Productivity Dispersion and the College Premium: Evidence from the United States 1977-1997
For the United States in 1987-2014, I document at business cycle frequencies that the high-skill workers’ employer size wage premium is high (low) in times of low (high) unemployment relative to that of the low-skill workers. Specifically, the differential employer size wage premium between high-skill and low-skill workers has an unconditional correlation of -0.4 with the unemployment rate, and varies by about 6 percent over the business cycle. The skill premium itself does not exhibit a clear business cycle pattern over the sample period.
Workplace Heterogeneity and the Returns to Versatility
Abstract In the canonical random on-the-job search model with continuous firm heterogeneity, I show that a mean-preserving spread of the firm-productivity distribution raises the returns to mobility, i.e., the inter-firm mobility of workers as measured by the number of outside contacts per employment spell. Both sorting and rent-share mechanisms play a role. In a further contribution, I distinguish frictional and structural impediments to mobility in order to establish a link between mobility and skills via the concept of versatility. Versatility enhances a person’s mobility since a mismatch between job requirements and the person’s skill set is less likely to occur. I provide some statisti…
Employment effects of skills around the world: Evidence from the PIAAC
Using an international survey that directly assesses the cognitive skills of participants, the author studies the effect of skills on employment in 32 countries. On average, a 1 standard deviation increase in numeracy is associated with an 8.4 percentage point increase in the probability of being employed, reducing the probability of being out of the labour force and unemployed by 6.4 and 2.1 percentage points, respectively. After controlling for numeracy, the estimated employment effect of years in education falls by one third, from 2.7 to 1.8 percentage points. Notably, the employment effect of skills is more pronounced in countries with higher unemployment.
A Note on Laws of Motion for Aggregate Distributions
I derive the law of motion for the aggregate distribution directly from the laws of motion for the individuals’ states. By relying on concepts from measure theory, the derivation is concise and intuitive. I address random shocks both at the micro level and at the macro level. Micro-level shocks completely cancel at the aggregate level provided that a law of large numbers applies. Therefore, the law of motion for the aggregate distribution is a deterministic process in the absence of macro-level uncertainty. If there are macro-level risks, the law of motion for the aggregate distribution exhibits a stochastic component additionally. I illustrate the formalism in a model of wealth accumulatio…
Small Employers, Large Employers and the Skill Premium
I document the comovement of the skill premium with the differential employer size wage premium between high- and low-skill workers in U.S. manufacturing during the postwar era. For the baseline specification, i.e., establishments with at least 500 employees categorized as large employers and non-production workers as high-skilled, I obtain a correlation coefficient of 0.87. Exploiting variations across subindustries while controlling for other potentially relevant factors, I estimate that an increase by ten log-points in the differential size premium is associated with an increase in the skill premium by three log-points.
Open It And They Will Come? The Impact of Fallen Barriers on Securities Market Participation
Various barriers may prevent people from entering a market. Will they participate in the market despite their inexperience once the barriers fall? I exploit the socalled German reunification experiment in order to assess the impact of removed market barriers on participation rates: While East Germans were deprived of the possibility to participate in capitalist securities markets before 1989, the reunification of Germany offered access to those markets. I estimate that a person is, ceteris paribus, by 25–30 percentage points less likely to participate over a 3–7 years horizon after being initially excluded from the securities market, suggesting a prominent role of financial experience in ex…
Job Mobility and Sorting: Theory and Evidence
Abstract Motivated by the canonical (random) on-the-job search model, I measure a person’s ability to sort into higher ranked jobs by the risk ratio of job-to-job transitions to transitions into unemployment. I show that this measure possesses various desirable features. Making use of the Survey of Income and Program Participation (SIPP), I study the relation between human capital and the risk ratio of job-to-job transitions to transitions into unemployment. Formal education tends to be positively associated with this risk ratio. General experience and occupational tenure have a pronounced negative correlation with both job-to-job transitions and transitions into unemployment, leaving the r…
A cross-country study of skills and unemployment flows
AbstractUsing an international survey that directly assesses the cognitive skills of the adult population, I study the relation between skills and unemployment flows across 37 countries. Depending on the specifically assessed domain, I document that skills have an unconditional correlation with the log-risk-ratio of exiting to entering unemployment of 0.65–0.68 across the advanced and skill-abundant countries in the sample. The relation is remarkably robust and it is unlikely to be due to reverse causality. I do not find evidence that this positive relation extends to the seven relatively less advanced and less skill-abundant countries in the sample: Peru, Ecuador, Indonesia, Mexico, Chile,…
A Cross-Country Study of Workers' Skills and Unemployment Flows
Using an international survey that directly assesses the cognitive skills of the adult population, I study the relation between skills and unemployment flows across 37 countries. Depending on the specifically assessed domain, I document that skills have an unconditional correlation with the log-risk-ratio of exiting to entering unemployment of 0.65–0.68 across the advanced and skill-abundant countries in the sample. The relation is remarkably robust and it is unlikely to be due to reverse causality. I do not find evidence that this positive relation extends to the seven relatively less advanced and less skill-abundant countries in the sample: Peru, Ecuador, Indonesia, Mexico, Chile, Turkey …
Trends and cycles in U.S. job mobility
Recent studies document a decline in U.S. labor-market fluidity from as early as the 1970s on. Making use of the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS), I uncover a pronounced increase in job-to-job mobility from the 1970s to the 1990s, i.e., the annual share of continuously employed job-to-job movers rises from 5.9 percent of the labor force in 1975–1979 to 8.8 percent in 1995–1999. Job-to-job mobility exhibits a downward trend only since the turn of the millennium. In order to provide a formal economic interpretation, I additionally estimate the parameters of the random on-the-job search model. Furthermore, I document that job-to-job mobility h…