Inter-Industry Mobility and the Cyclical Upgrading of Labor

48 Pages Posted: 2 Jul 2007

See all articles by Mark Bils

Mark Bils

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

Kenneth McLaughlin

affiliation not provided to SSRN

Date Written: August 1992

Abstract

We investigate whether a market-clearing model of the labor market is consistent with the cyclical upgrading of labor: workers tend to move to higher paying industries in expansions and to lower paying industries in contractions. By applying Roy's (1951) model of self-selection to industry fluctuations, we show that cyclical upgrading can be consistent with market clearing. Applying the model to inter-industry mobility patterns in panel data, we find data of substantial selection by comparative advantage. However, the panel data reveal a selection process that is consistent with cyclical upgrading. Thus the model does not simultaneously account for interindustry mobility in panel data and cyclical upgrading.

Suggested Citation

Bils, Mark and McLaughlin, Kenneth, Inter-Industry Mobility and the Cyclical Upgrading of Labor (August 1992). NBER Working Paper No. w4130. Available at SSRN: https://ssrn.com/abstract=476199

Mark Bils (Contact Author)

University of Rochester - Department of Economics ( email )

Harkness Hall
Rochester, NY 14627-0158
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Kenneth McLaughlin

affiliation not provided to SSRN

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