Skill-Biased Reallocation
Year: 2025
Type: report
Abstract: Workers displaced by the reallocation of labor demand across industries suffer persistent earnings losses, in large part due to higher unemployment risk. This paper quantifies the aggregate unemployment implications of a reallocation of labor demand. I develop a search and matching model with multiple industries and industry specific skill that is calibrated to the US economy. In the model a reallocation shock leads to up to a 0.5 percentage points rise in unemployment. The combination of industry specific skill and imperfect substitutability between workers of different skill levels are key to this result.
Source: Apollo (University of Cambridge)
DOI: 10.17863/cam.127763
Author: Hanks, F.
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7131408261
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