Working Paper: NBER ID: w20628
Authors: Martin Gervais; Nir Jaimovich; Henry E. Siu; Yaniv Yedidlevi
Abstract: Why is unemployment higher for younger individuals? We address this question in a frictional model of the labor market that features learning about occupational fit. In order to learn the occupation in which they are most productive, workers sample occupations over their careers. Because young workers are more likely to be in matches that represent a poor occupational fit, they spend more time in transition between occupations. Through this mechanism, our model can replicate the observed age differences in unemployment which, as in the data, are due to differences in job separation rates.
Keywords: No keywords provided
JEL Codes: E0; J0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| age (J14) | unemployment (J64) |
| poor occupational matches (J29) | unemployment (J64) |
| young workers (J29) | poor occupational matches (J29) |
| separation rates (J12) | unemployment (J64) |
| age (J14) | separation rates (J12) |
| unemployment (J64) | age profile (J11) |
| separation rates (J12) | age profile (J11) |