The Distributional Impacts of Worker Reallocation: Evidence from Europe

By John C Bluedorn, Francesca Caselli, Niels-Jakob H Hansen, Ippei Shibata, Marina Mendes Tavares

June 24, 2022

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John C Bluedorn, Francesca Caselli, Niels-Jakob H Hansen, Ippei Shibata, and Marina Mendes Tavares. The Distributional Impacts of Worker Reallocation: Evidence from Europe, (USA: International Monetary Fund, 2022) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Business cycles, Economic growth, Economic recession, Labor, Unemployment, Unskilled labor, Wages

Keywords: Business cycles, Earnings consequence, Earnings gain, Economic recession, Europe, Job transitions, Labor market mobility, Occupation transition, Occupational mobility, Routine occupation, Routinization, Unemployment, Unskilled labor, Wages, Worker reallocation

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/124
Stock No:

WPIEA2022124
ISBN:

9798400212512
ISSN:

1018-5941

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