Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: 10th of September
Room : 3001

Léonard BOCQUET (PSE-Cambridge) – “The Network Origin of Slow Labor Reallocation”

Abstract :

This paper studies the slow reallocation of workers across occupations following trade and technology shocks. Using administrative data on worker skills, I construct a network of occupations and find that it is (1) sparse, (2) features clusters of occupations with similar skills, and (3) exhibits a few ‘bridge occupations’ linking distinct clusters. Employer-employee data reveal that transitions through these bridges help workers reallocate to better employment opportunities. To explain this, I develop a job search model within networks and demonstrate that bridge occupations can create bottlenecks which significantly affect reallocation speed. A quantitative version of the model, calibrated to French data, shows that the arrival of automation and AI imply slow reallocation. However, policies targeting bridge occupations can substantially accelerate the process, by helping workers reskill. These findings highlight the importance of the occupation network for the economy’s adjustment to reallocation shocks and for the design of labor market policies.

Organizers:
Benoît SCHMUTZ (Pôle d’économie du CREST)
Clément MALGOUYRES (Pôle d’économie du CREST)
Sponsors:
CREST