The cyclical behavior of equilibrium unemployment and vacancies revisited

Recently, a number of authors have argued that the standard search model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies, given shocks of a plausible magnitude. We use data on the cost of vacancy creation and cyclicality of wages to identify the two key parameters of the model - the value of non-market activity and the bargaining weights. Our calibration implies that the model is, in fact, consistent with the data. JEL Classification: E24, E32, J41, J63, J64business cycles, labor markets, Matching, Search

Occupational Mobility and Wage Inequality, Second Version

In this study we argue that wage inequality and occupational mobility are intimately related. We are motivated by our empirical findings that human capital is occupation-specific and that the fraction of workers switching occupations in the United States was as high as 16% a year in the early 1970s and had increased to 19% by the early 1990s. We develop a general equilibrium model with occupation-specific human capital and heterogeneous experience levels within occupations. We argue that the increase in occupational mobility was due to the increase in the variability of productivity shocks to occupations. The model, calibrated to match the increase in occupational mobility, accounts for over 90% of the increase in wage inequality over the period. A distinguishing feature of the theory is that it accounts for changes in within-group wage inequality and the increase in the variability of transitory earnings.Occupational Mobility, Wage Inequality, Within-Group Inequality, Human Capital, Sectoral Reallocation

Rising Occupational and Industry Mobility in the United States:1968-1993

We analyze the dynamics of worker mobility in the United States over the 1968-1993 period at various levels of occupational and industry aggregation. We find a substantial overall increase in occupational and industry mobility over the period and document the levels and time trends in mobility for various age-education subgroups of the population. To control for measurement error in occupation and industry coding, we develop a method that utilizes the newly released, by the Panel Study of Income Dynamics, Retrospective Occupation-Industry Supplemental Data Files. We emphasize the importance of the findings for understanding a number of issues in macro and labor economics, including changes in wage inequality, productivity, life-cycle earnings profiles, job stability and job security.Occupational Mobility, Industry Mobility, Career Mobility, Sectoral Real-location

Case Study of Unemployment Insurance Reform in North Carolina

In July 1, 2013 unemployed workers in North Carolina lost access to all federally ?nanced unemployment bene?t extensions. In this document, the authors collect and describe available evidence on the performance of the labor market in North Carolina following this reform

Occupational Specificity of Human Capital

In this paper we document substantial returns to occupational tenure. Everything else being constant, ten years of occupational tenure are likely to increase wages by at least $19\%$. Moreover, we show that when occupational experience is taken into account, tenure with an industry or an employer have little importance in explaining the wage one receives. This finding is consistent with occupational specificity of human capital. We utilize the newly released by the Panel Study of Income Dynamics (PSID) Retrospective Occupation-Industry Supplemental Data Files that retroactively recode the reported occupations and industries of household heads and wives for the 1968-1980 period. We argue that the methodology employed by the PSID in constructing the Retrospective Files - different from the one employed in the original coding of the occupation and industry affiliation data - minimizes the error in identifying true industry and occupation switches, a crucial step in constructing consistent occupational and industry tenure. We use the Retrospective Files to document that the originally coded occupation and industry affiliation data in the PSID is often incorrect, to evaluate various methods for identifying genuine occupation and industry switches, and to demonstrate that the use of raw or improperly corrected occupational or industry data may bias the results of an empirical investigation substantially.Human Capital

The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited

Recently, a number of authors have argued that the standard search model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies, given shocks of a plausible magnitude. We use data on the cost of vacancy creation and cyclicality of wages to identify the two key parameters of the model - the value of non-market activity and the bargaining weights. Our calibration implies that the model is, in fact, consistent with the data.Search, Matching, Business Cycles, Labor Markets