The Distributional Impacts of Worker Reallocation: Evidence from Europe

24 Pages Posted: 7 Jul 2022

See all articles by John C. Bluedorn

John C. Bluedorn

International Monetary Fund (IMF) - Research Department

Francesca Caselli

International Monetary Fund (IMF)

Niels-Jakob Hansen

International Monetary Fund (IMF)

Ippei Shibata

International Monetary Fund (IMF)

Marina Mendes Tavares

International Monetary Fund (IMF) - Policy Development and Review Department

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2022

Abstract

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.

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

JEL Classification: E32, J62, J63, P52, J30, J64, E30, J44

Suggested Citation

Bluedorn, John C. and Caselli, Francesca and Hansen, Niels-Jakob and Shibata, Ippei and Mendes Tavares, Marina, The Distributional Impacts of Worker Reallocation: Evidence from Europe (June 1, 2022). IMF Working Paper No. 2022/124, Available at SSRN: https://ssrn.com/abstract=4154584

John C. Bluedorn (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Francesca Caselli

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Niels-Jakob Hansen

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ippei Shibata

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Marina Mendes Tavares

International Monetary Fund (IMF) - Policy Development and Review Department ( email )

700 19th St. NW
Washington, DC 20431
United States

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