Working Paper: CEPR ID: DP17943
Authors: Davide Alonzo; Giovanni Gallipoli
Abstract: We characterize the employment value of different worker-occupation matches and estimate the substitutability of match-specific inputs in production. In an equilibrium model of the U.S. labor market, we examine the responses of employment and wages to shifts in technology and match values. Earnings are mainly driven by technology while match value heterogeneity influences the distribution of workers across occupations. The model delivers measures of rents and compensating differentials. After 1980, employment rents increased for educated workers but stagnated for others. Compensating differentials have risen on average, particularly in occupations where worker mobility has grown.
Keywords: Employment; Wages; Equilibrium; Technological Change; Heterogeneity; Occupations
JEL Codes: D51; D58; J2; J3; J62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technological change (O33) | Employment dynamics (J63) |
| Technological change (O33) | Wage dynamics (J31) |
| Technological advancements (O33) | Earnings (J31) |
| Education (I29) | Employment rents for educated workers (J69) |
| Employment rents for educated workers (J69) | Economic benefits derived from employment (J68) |
| Worker characteristics (J29) | Distribution of match values (C78) |
| Nonwage attributes (J39) | Workers’ valuations of employment opportunities (J29) |
| Growing divide between cognitive and manual jobs (J29) | Employment rents for educated workers (J69) |
| Growing divide between cognitive and manual jobs (J29) | Employment rents for noncollege male workers (J79) |