TY - JOUR AU - Adda,Jerome AU - Dustmann,Christian AU - Meghir,Costas AU - Robin,Jean-Marc TI - Career Progression, Economic Downturns, and Skills JF - National Bureau of Economic Research Working Paper Series VL - No. 18832 PY - 2013 Y2 - February 2013 UR - http://www.nber.org/papers/w18832 L1 - http://www.nber.org/papers/w18832.pdf N1 - Author contact info: Jerome Adda Department of Economics European University Institute Villa San Paolo Via della Piazzuola 43 50133 Firenze Tel: +390554685955 E-Mail: j.adda@ucl.ac.uk Christian Dustmann Department of Economics University College London Gower Street, London WC1E 6BT, UK E-Mail: c.dustmann@ucl.ac.uk Costas Meghir Department of Economics Yale University 37 Hillhouse Avenue New Haven, CT 06511 Tel: 203/432-3558 E-Mail: c.meghir@yale.edu Jean-Marc Robin Sciences Po Department of Economics (Office room, J402) 28 rue des Saints Pères 75007 Paris France E-Mail: jeanmarc.robin@sciences-po.fr AB - This paper analyzes the career progression of skilled and unskilled workers, with a focus on how careers are affected by economic downturns and whether formal skills, acquired early on, can shield workers from the effect of recessions. Using detailed administrative data for Germany for numerous birth cohorts across different regions, we follow workers from labor market entry onwards and estimate a dynamic life-cycle model of vocational training choice, labor supply, and wage progression. Most particularly, our model allows for labor market frictions that vary by skill group and over the business cycle. We find that sources of wage growth differ: learning-by-doing is an important component for unskilled workers early on in their careers, while job mobility is important for workers who acquire skills in an apprenticeship scheme before labor market entry. Likewise, economic downturns affect skill groups through very different channels: unskilled workers lose out from a decline in productivity and human capital, whereas skilled individuals suffer mainly from a lack of mobility. ER -