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Globalization and the Jobs Ladder

Davidson, Carl ; Heyman, Fredrik LU ; Matusz, Steven ; Sjöholm, Fredrik LU and Chun Zhu, Susan (2018) In Working Papers
Abstract
Globalization might affect the mix of jobs available in an economy and the rate at which workers gain skills. We develop a model in which firms differ in terms of productivity and skills and use the model to examine how globalization affects the wage distribution and the career path of workers as they move up the jobs ladder. There are two types of skills that determine a worker’s productivity in the model: the ability to work with the appropriate technology and the ability to facilitate international commerce. Workers imperfectly acquire these skills on the job. Firms cannot costlessly observe the skills embodied in a worker but can observe each potential recruit’s employment history. In equilibrium, firms self-select into groups that use... (More)
Globalization might affect the mix of jobs available in an economy and the rate at which workers gain skills. We develop a model in which firms differ in terms of productivity and skills and use the model to examine how globalization affects the wage distribution and the career path of workers as they move up the jobs ladder. There are two types of skills that determine a worker’s productivity in the model: the ability to work with the appropriate technology and the ability to facilitate international commerce. Workers imperfectly acquire these skills on the job. Firms cannot costlessly observe the skills embodied in a worker but can observe each potential recruit’s employment history. In equilibrium, firms self-select into groups that use different networks to fill vacancies. Our results indicate that although falling trade costs may result in greater wage inequality, if trade costs are initially high, it can also lead to a wider path up the jobs ladders and less time spent in entry level jobs. The key assumptions and predictions are confirmed in data on recruitments and job mobility in Sweden. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working paper
publication status
published
subject
keywords
Job Ladders, Globalization, Wages, Inequality, Export, F10, F20, J30
in
Working Papers
issue
2018:31
pages
54 pages
language
English
LU publication?
yes
id
1d10c245-367b-4ce7-95ea-94db3c72190d
alternative location
https://swopec.hhs.se/lunewp/abs/lunewp2018_031.htm
date added to LUP
2018-11-12 12:21:50
date last changed
2018-11-21 21:43:09
@misc{1d10c245-367b-4ce7-95ea-94db3c72190d,
  abstract     = {Globalization might affect the mix of jobs available in an economy and the rate at which workers gain skills. We develop a model in which firms differ in terms of productivity and skills and use the model to examine how globalization affects the wage distribution and the career path of workers as they move up the jobs ladder. There are two types of skills that determine a worker’s productivity in the model: the ability to work with the appropriate technology and the ability to facilitate international commerce. Workers imperfectly acquire these skills on the job. Firms cannot costlessly observe the skills embodied in a worker but can observe each potential recruit’s employment history. In equilibrium, firms self-select into groups that use different networks to fill vacancies. Our results indicate that although falling trade costs may result in greater wage inequality, if trade costs are initially high, it can also lead to a wider path up the jobs ladders and less time spent in entry level jobs. The key assumptions and predictions are confirmed in data on recruitments and job mobility in Sweden. },
  author       = {Davidson, Carl and Heyman, Fredrik and Matusz, Steven and Sjöholm, Fredrik and Chun Zhu, Susan},
  language     = {eng},
  note         = {Working Paper},
  number       = {2018:31},
  series       = {Working Papers},
  title        = {Globalization and the Jobs Ladder},
  url          = {https://swopec.hhs.se/lunewp/abs/lunewp2018_031.htm},
  year         = {2018},
}