Publication type
Research Paper
Series Number
117851
Series
IZA Discussion Papers
Authors
Publication date
April 15, 2025
Summary:
As technological advances accelerate and labour demands shift, the ability of workers to reallocate across occupations will be crucial for shaping labour market dynamics, inequality, and effective policy design. In this paper, we develop a tractable equilibrium model of the labour market that incorporates heterogeneous labour supply elasticities to different occupations and across different occupation pairs. Using worker flows from German administrative data, we estimate these elasticities and validate them through external measures such as occupational licensing and task distance. Our model quantifies the heterogeneous impacts of recent labour demand shifts on occupational wages and employment, highlighting the role of cross-occupation effects in shaping market responses to shocks. Finally, we leverage this framework to project employment flows and wage adjustments under future occupational demand shifts that are implied by the latest automation technologies.
ISSN
23659793
Subjects
#588948