20220623-IMF-The_Distributional_Impacts_of_Worker_Reallocation_Evidence_from_Europe_24页_1mb

The Distributional Impacts of Worker Reallocation: Evidence from Europe

This paper examines worker reallocation across occupations and industries in 30 European countries from 1983 to 2019 using individual-level data from EU-LFS and EU-SILC.

Key Findings

1. Worker Characteristics

   • Young workers experience higher rates of job/sector/occupation switches with earnings gains from "on-the-job" transitions
   • Low-skilled workers face significant earnings penalties during reemployment after unemployment spells
   • Women and older workers are less likely to switch jobs or occupations

2. Business Cycle Effects

   • Job/sector transitions remain stable across business cycles
   • Earnings gains during "on-the-job" transitions remain consistent
   • "Via-unemployment" transitions show larger earnings penalties during recessions

3. Routinization Trends

   • Routine job shares declined from 61% in 1995 to 55% in 2019
   • Workers transitioning from non-routine to routine occupations face significantly lower earnings gains
   • The negative impact worsens for low-skilled and older workers during recessions

The study highlights significant distributional impacts of worker reallocation, with young workers benefiting and low-skilled/older workers facing disadvantages, particularly during economic downturns.