Skill Mismatch and the Costs of Job Displacement
Frank Neffke, Ljubica Nedelkoska, Simon Wiederhold
Research Policy,
Nr. 2,
2024
Abstract
Establishment closures have lasting negative consequences for the workers displaced from their jobs. We study how these consequences vary with the amount of skill mismatch that workers experience after job displacement. Developing new measures of occupational skill redundancy and skill shortage, we analyze the work histories of individuals in Germany between 1975 and 2010. We estimate difference-in-differences models, using a sample of displaced workers who are matched to statistically similar non-displaced workers. We find that displacements increase the probability of occupation change eleven-fold. Moreover, the magnitude of post-displacement earnings losses strongly depends on the type of skill mismatch that workers experience in such job switches. Whereas skill shortages are associated with relatively quick returns to the earnings trajectories that displaced workers would have experienced absent displacement, skill redundancy sets displaced workers on paths with permanently lower earnings. We show that these differences can be attributed to differences in mismatch after displacement, and not to intrinsic differences between workers making different post-displacement career choices.
Artikel Lesen
Skill Mismatch and the Costs of Job Displacement
Frank Neffke, Ljubica Nedelkoska, Simon Wiederhold
Abstract
Establishment closures have lasting negative consequences for the workers they displace from their jobs. We study how these consequences vary with the amount of skill mismatch that workers experience after job displacement. Developing new measures of occupational skill redundancy and skill shortage, we analyze the work histories of individuals in Germany between 1975 and 2010. We estimate differencein- differences models, using a sample of displaced workers who are matched to statistically similar non-displaced workers. We find that displacements increase the probability of occupational change eleven-fold. Moreover, the magnitude of postdisplacement earnings losses strongly depends on the type of skill mismatch that workers experience in such job switches. Whereas skill shortages are associated with relatively quick returns to the counterfactual earnings trajectories that displaced workers would have experienced absent displacement, skill redundancy sets displaced workers on paths with permanently lower earnings. We show that these differences can be attributed to differences in mismatch after displacement, and not to intrinsic differences between workers making different post-displacement career choices.
Artikel Lesen
Mayer ref rec
Referierte Publikationen ...
Zur Seite
Produktivität
Produktivität: Mehr mit weniger durch besser Die verfügbaren Ressourcen sind begrenzt. Nur wenn wir sie...
Zur Seite
On the Employment Consequences of Automation and Offshoring: A Labor Market Sorting View
Ester Faia, Sébastien Laffitte, Maximilian Mayer, Gianmarco Ottaviano
Lili Yan Ing, Gene M. Grossman (eds), Robots and AI: A New Economic Era. Routledge: London,
2022
Abstract
We argue that automation may make workers and firms more selective in matching their specialized skills and tasks. We call this phenomenon “core-biased technological change”, and wonder whether something similar could be relevant also for offshoring. Looking for evidence in occupational data for European industries, we find that automation increases workers’ and firms’ selectivity as captured by longer unemployment duration, less skill-task mismatch, and more concentration of specialized knowledge in specific tasks. This does not happen in the case of offshoring, though offshoring reinforces the effects of automation. We show that a labor market model with two-sided heterogeneity and search frictions can rationalize these empirical findings if automation strengthens while offshoring weakens the assortativity between workers’ skills and firms’ tasks in the production process, and automation and offshoring complement each other. Under these conditions, automation decreases employment and increases wage inequality whereas offshoring has opposite effects.
Artikel Lesen
How Can Skill Mismatch be Measured? New Approaches with PIAAC
Daniela Ackermann-Piek, Anja Perry, Simon Wiederhold
Methods, Data, Analyses,
Nr. 2,
2014
Abstract
Measuring skill mismatch is problematic, because objective data on an individual skill level are often not available. Recently published data from the Program for the International Assessment of Adult Competencies (PIAAC) provide a unique opportunity for gauging the importance of skill mismatch in modern labor markets. This paper systematically compares existing measures of skill mismatch in terms of their implications for labor market outcomes. We also provide a new measure that addresses an important limitation of existing measures, namely, assigning a single competency score to individuals. We find that the importance of skill mismatch for individual earnings differs greatly, depending on the measure of mismatch used.
Artikel Lesen