What Should I Be When I Grow Up? Occupations and Unemployment over the Life Cycle
Why is unemployment higher for younger individuals? We address this question in a frictional model of the labor market that features learning about occupational fit. In order to learn the occupation in which they are most productive, workers sample occupations over their careers. Because young workers are more likely to be in matches that represent a poor occupational fit, they spend more time in transition between occupations. Through this mechanism, our model can replicate the observed age differences in unemployment which, as in the data, are due to differences in job separation rates.
We thank Gadi Barlevy, Paul Beaudry, Bjorn Brugemann, Mick Devereux, Aspen Gorry, Michael Pries, Richard Rogerson, Shouyong Shi, as well as seminar participants at various institutions and conferences for helpful discussion, and Gueorgui Kambourov and Iourii Manovskii for providing us with their data on occupational mobility. Siu and Yedid-Levi thank the Social Sciences and Humanities Research Council of Canada for support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Martin Gervais & Nir Jaimovich & Henry E. Siu & Yaniv Yedid-Levi, 2016. "What Should I Be When I Grow Up? Occupations and Unemployment over the Life Cycle," Journal of Monetary Economics, . citation courtesy of