Cover IMF Working Papers
The Distributional Impacts of Worker Reallocation: Evidence from Europe
Author:
Mr. John C Bluedorn
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,
Francesca Caselli
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Mr. Niels-Jakob H Hansen
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Mr. Ippei Shibatanull

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Marina M. Tavares
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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 124
Language:
English
Publication Date:
24 Jun 2022
DOI:
https://doi.org/10.5089/9798400212512.001
ISBN:
9798400212512
ISSN:
1018-5941
Pages:
24
Keywords:
Labor market mobility; Job transitions; Occupational mobility; Routinization; Business cycles; worker reallocation; routine occupation; earnings gain; earnings consequence; occupation transition; Economic recession; Wages; Unemployment; Unskilled labor; Europe
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2022: Issue 124