Are Specific Skills an Obstacle to Labor Market Adjustment?

This paper shows that specialized education reduces workers' mobility and hence their ability to cope with economic changes. We illustrate this point using labor force data from two countries having experienced important macroeconomic turbulence; a large economy with rigid labor markets, Poland...

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Main Authors:	Lamo, Ana, Messina, Julian, Wasmer, Etienne
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Human Capital Skills Occupational Choice Labor Productivity J240 Job, Occupational, and Intergenerational Mobility Promotion J620 Unemployment: Models, Duration, Incidence, and Job Search J640
Online Access:	http://hdl.handle.net/10986/4660

id	okr-10986-4660
recordtype	oai_dc
spelling	okr-10986-46602021-04-23T14:02:19Z Are Specific Skills an Obstacle to Labor Market Adjustment? Lamo, Ana Messina, Julian Wasmer, Etienne Human Capital Skills Occupational Choice Labor Productivity J240 Job, Occupational, and Intergenerational Mobility Promotion J620 Unemployment: Models, Duration, Incidence, and Job Search J640 This paper shows that specialized education reduces workers' mobility and hence their ability to cope with economic changes. We illustrate this point using labor force data from two countries having experienced important macroeconomic turbulence; a large economy with rigid labor markets, Poland, and a small open economy with increased flexibility, Estonia. We find that holding a vocational degree is associated with much longer unemployment duration spells and higher likelihood of leaving activity for older workers. We then build a theoretical framework in which young agents' careers are heavily determined by the type of initial education, and analyze the transition to a new steady-state after a sectoral demand shift. Quantitative exercises suggest that the over-specialization of the labor force in Poland led to much higher and persistent unemployment compared to Estonia during the period of EU enlargement. Traditional labor market institutions (wage rigidity and employment protection) lead to an increase of the unemployment gap, but to a lesser extent. 2012-03-30T07:29:06Z 2012-03-30T07:29:06Z 2011 Journal Article Labour Economics 09275371 http://hdl.handle.net/10986/4660 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Poland Estonia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Human Capital Skills Occupational Choice Labor Productivity J240 Job, Occupational, and Intergenerational Mobility Promotion J620 Unemployment: Models, Duration, Incidence, and Job Search J640
spellingShingle	Human Capital Skills Occupational Choice Labor Productivity J240 Job, Occupational, and Intergenerational Mobility Promotion J620 Unemployment: Models, Duration, Incidence, and Job Search J640 Lamo, Ana Messina, Julian Wasmer, Etienne Are Specific Skills an Obstacle to Labor Market Adjustment?
geographic_facet	Poland Estonia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	This paper shows that specialized education reduces workers' mobility and hence their ability to cope with economic changes. We illustrate this point using labor force data from two countries having experienced important macroeconomic turbulence; a large economy with rigid labor markets, Poland, and a small open economy with increased flexibility, Estonia. We find that holding a vocational degree is associated with much longer unemployment duration spells and higher likelihood of leaving activity for older workers. We then build a theoretical framework in which young agents' careers are heavily determined by the type of initial education, and analyze the transition to a new steady-state after a sectoral demand shift. Quantitative exercises suggest that the over-specialization of the labor force in Poland led to much higher and persistent unemployment compared to Estonia during the period of EU enlargement. Traditional labor market institutions (wage rigidity and employment protection) lead to an increase of the unemployment gap, but to a lesser extent.
format	Journal Article
author	Lamo, Ana Messina, Julian Wasmer, Etienne
author_facet	Lamo, Ana Messina, Julian Wasmer, Etienne
author_sort	Lamo, Ana
title	Are Specific Skills an Obstacle to Labor Market Adjustment?
title_short	Are Specific Skills an Obstacle to Labor Market Adjustment?
title_full	Are Specific Skills an Obstacle to Labor Market Adjustment?
title_fullStr	Are Specific Skills an Obstacle to Labor Market Adjustment?
title_full_unstemmed	Are Specific Skills an Obstacle to Labor Market Adjustment?
title_sort	are specific skills an obstacle to labor market adjustment?
publishDate	2012
url	http://hdl.handle.net/10986/4660
_version_	1764392292912726016

Are Specific Skills an Obstacle to Labor Market Adjustment?

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