NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Inter-Industry Mobility and the Cyclical Upgrading of Labor

Mark Bils, Kenneth J. McLaughlin

NBER Working Paper No. 4130
Issued in August 1992
NBER Program(s):LS, EFG

We investigate whether a market-clearing model of the labor market is consistent with the cyclical upgrading of labor: workers tend to move to higher paying industries in expansions and to lower paying industries in contractions. By applying Roy's (1951) model of self-selection to industry fluctuations, we show that cyclical upgrading can be consistent with market clearing. Applying the model to inter-industry mobility patterns in panel data, we find data of substantial selection by comparative advantage. However, the panel data reveal a selection process that is consistent with cyclical upgrading. Thus the model does not simultaneously account for interindustry mobility in panel data and cyclical upgrading.

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Document Object Identifier (DOI): 10.3386/w4130

Published: McLaughlin, Kenneth J & Bils, Mark, 2001. "Interindustry Mobility and the Cyclical Upgrading of Labor," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 94-135, January. citation courtesy of

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