The 'Dynamic' of Job Competition During the ICT Revolution

50 Pages Posted: 1 Apr 2007

See all articles by Arnaud Chéron

Arnaud Chéron

University of Angers - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP); Université du Maine - Groupe d' Analyse des Itineraires et Niveaux Salariaux (GAINS)

François Langot

University of Angers - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP); Université du Maine - Groupe d' Analyse des Itineraires et Niveaux Salariaux (GAINS); IZA Institute of Labor Economics

Eva Moreno-Galbis

Université du Maine

Date Written: March 2007

Abstract

Our paper seeks to gain insights on the effect of labor market institutions on the evolution of overeducation (job competition), unemployment inequalities and job instability during the polarization process of the labor market fostered by the diffusion of novel technologies. Based on micro data, we first present some stylized facts characterizing the occidental countries' labor markets. We then develop an endogenous job destruction framework á la Mortensen and Pissarides (1994) where each individual is endowed with a given ability level. The process of contact between the set of heterogeneous workers and firms is represented by a traditional matching function. The segmentation of the labor market between workers having the required ability to occupy cognitive jobs (where novel technologies are used) and the rest of the workers occupying simple jobs is endogenously determined. Firms offering a cognitive job support a set up cost but ICT are assumed to improve their productivity. When simulated the model manages to reproduce the U-shaped path followed by the ability requirements needed in cognitive positions as ICT got increasingly diffused. Furthermore, we also draw conclusions concerning the evolution of job stability, the size of each labor market segment and the unemployment rates.

Keywords: technological change, overeducation, job turnover, heterogeneous agents

JEL Classification: J23, J24, J63, L23, O33

Suggested Citation

Cheron, Arnaud and Langot, Francois and Moreno-Galbis, Eva, The 'Dynamic' of Job Competition During the ICT Revolution (March 2007). IZA Discussion Paper No. 2671. Available at SSRN: https://ssrn.com/abstract=977538

Arnaud Cheron

University of Angers - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP) ( email )

Ecole Normale Superieure
48 boulevard Jourdan
75014 Paris
France

Université du Maine - Groupe d' Analyse des Itineraires et Niveaux Salariaux (GAINS)

72085 Le Mans Cedex 9
France

Francois Langot

University of Angers - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP) ( email )

Ecole Normale Superieure
48 boulevard Jourdan
75014 Paris
France

Université du Maine - Groupe d' Analyse des Itineraires et Niveaux Salariaux (GAINS) ( email )

72085 Le Mans Cedex 9
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Eva Moreno-Galbis (Contact Author)

Université du Maine ( email )

72085 Le Mans Cedex 9
France

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
53
Abstract Views
557
rank
397,310
PlumX Metrics