Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324410 
Year of Publication: 
2024
Series/Report no.: 
IFS Working Papers No. 24/28
Publisher: 
The Institute for Fiscal Studies (IFS), London
Abstract: 
We develop a tractable equilibrium model of the labour market, featuring heterogeneous labour supply elasticities across occupations that can be estimated in a baseline period using observed worker flows. We use this model to study the heterogeneous impact of subsequent demand shifts on wages and employment in Germany. We validate the estimated elasticities with external correlates, including occupational licensing and task distance. Cross-occupation effects, capturing the response to demand shifts in close substitute occupations, are particularly important for explaining the labour market's response to shocks. Overall, heterogeneous supply elasticities play a key role in explaining occupational changes over recent decades.
Subjects: 
Heterogeneous Labour Supply Elasticities
Occupational Substitutability
Gross Job Flows
German Panel Data
Labour Demand Shocks
Occupational Employment and Wages
JEL: 
J21
J23
J24
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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