Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101026
Authors: 
Mandelman, Federico S.
Year of Publication: 
2013
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2013-17
Abstract: 
During the last thirty years, labor markets in advanced economies were characterized by their remarkable polarization. As job opportunities in middle-skill occupations disappeared, employment opportunities concentrated in the highest- and lowest-wage occupations. I develop a two-country stochastic growth model that incorporates trade in tasks, rather than in goods, and reveal that this setup can replicate the observed polarization in the United States. This polarization was not a steady process: the relative employment share of each skill group fluctuated significantly over short-to-medium horizons. I show that the domestic and international aggregate shocks estimated within this framework can rationalize such employment dynamics while providing a good fit to the macroeconomic data. The model is estimated with employment data for different skills groups and trade-weighted macroeconomic indicators.
Subjects: 
labor market polarization
international business cycles
heterogeneous agents
stochastic growth
two-country models
JEL: 
F16
F41
Document Type: 
Working Paper

Files in This Item:
File
Size
715.28 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.