An Estimate of a Sectoral Model of Labor Mobility

50 Pages Posted: 28 Dec 2006 Last revised: 28 Apr 2021

See all articles by Boyan Jovanovic

Boyan Jovanovic

New York University - Department of Economics

Robert A. Moffitt

Johns Hopkins University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: January 1990

Abstract

This paper develops a model of sectoral labor mobility and tests its main implications. The model nests two distinct hypotheses on the origin of mobility: (a) sectoral shocks (Lucas and Prescott, 1974) and (b) worker-employer mismatch (Jovanovic, 1979, Miller, 1984, Flinn, 1986). We estimate the relative importance of each hypothesis, and find that the bulk of labor mobility is caused by mismatch rather than by sectoral shift. We then try to put a value on society's match-specific information. That is, we ask to what extent the availability of the option to change jobs raises GNP. We find that the mobility option raises expected earnings by roughly between 8.5 percent and 13 percent of labor earnings, which translates to an increase in GNP of between 6 percent and 9 percent.

Suggested Citation

Jovanovic, Boyan and Moffitt, Robert, An Estimate of a Sectoral Model of Labor Mobility (January 1990). NBER Working Paper No. w3227, Available at SSRN: https://ssrn.com/abstract=468365

Boyan Jovanovic (Contact Author)

New York University - Department of Economics ( email )

19 w 4 st.
New York, NY 10012
United States

Robert Moffitt

Johns Hopkins University - Department of Economics ( email )

Baltimore, MD 21218-2685
United States
410-516-7611 (Phone)
410-516-7600 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
34
Abstract Views
562
PlumX Metrics