Working Paper: CEPR ID: DP14697
Authors: Carlos Carrillo-Tudela; Ludo Visschers
Abstract: This paper studies the extent to which the cyclicality of gross and net occupational mobility shapes that of aggregate unemployment and its duration distribution. Using the SIPP, we document the relation between workers' (gross and net) occupational mobility and unemployment duration over the long run and business cycle. To interpret this evidence, we develop an analytically and computationally tractable stochastic equilibrium model with heterogenous agents and occupations as well as aggregate uncertainty. The model is quantitatively consistent with several important features of the US labor market: procyclical gross and countercyclical net occupational mobility, the large volatility of unemployment and the cyclical properties of the unemployment duration distribution, among others. Our analysis shows that "excess" occupational mobility due to workers' changing career prospects interacts with aggregate conditions to drive fluctuations of aggregate unemployment and its duration distribution.
Keywords: unemployment; business cycle; rest; search; occupational mobility
JEL Codes: E24; E30; J62; J63; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| gross occupational mobility (J62) | unemployment duration (J64) |
| unemployment duration (J64) | gross occupational mobility (J62) |
| net occupational mobility (J62) | unemployment duration (J64) |
| unemployment duration (J64) | net occupational mobility (J62) |
| excess mobility (J62) | unemployment fluctuations (J64) |
| changing career prospects (J62) | excess mobility (J62) |
| unemployment rate (J64) | gross occupational mobility (J62) |
| unemployment rate (J64) | net occupational mobility (J62) |