Declining Job Reallocation in Europe: The Role of Shocks, Market Power, and Technology
with F.Biondi (DICE), M.Mertens (MIT), and J.Miranda (IWH). [Draft] [VoxEU] - Revise and Resubmit, Journal of the European Economic Association.Â
We study changes in business dynamism in Europe after 2000 using novel micro-aggregated data that we collected for 19 European countries. In all countries, we document a broad-based decline in job reallocation rates that concerns most economic sectors and size classes. This decline is mainly driven by dynamics within sectors, size, and age classes rather than by compositional changes. Large and mature firms experience the strongest decline in job reallocation rates. Simultaneously, the employment shares of young firms decline. Consistent with US evidence, firms' employment has become less responsive to productivity shocks. However, the dispersion of firms' productivity shocks has decreased too. To enhance our understanding of these patterns, we derive and apply a novel firm-level framework that relates changes in firms' sales, market power, wages, and production technology to firms' responsiveness and job reallocation.
Unwilling to reskill? Evidence from a survey experiment with Italian jobseekers
with A.Delfino (Bocconi), A.Garnero (OECD), M.Leonardi (University of Milan), and R.Sadun (HBS). [Preliminary draft available upon request]
We study demand-side barriers preventing jobseekers from pursuing reskilling in high-demand occupations. By means of a discrete choice experiment, we quantify the demand for generic training and reskilling among Italian jobseekers. Results indicate that there is substantial heterogeneity in the intention to reskill across various jobseeker groups, but also within-group across different types of training programs. Estimates of the willingness to pay for different training features indicate that participants value positively a higher job-finding rate post-training, but on average assign no positive value to reskilling compared to generic training. We implement two different types of policy experiments to understand how to stimulate interest in reskilling. First, we find that a light-touch randomized informational treatment is effective in increasing interest in reskilling. Second, policy simulations show that unconditional training subsidies may not lead to higher take-up of reskilling.
Firm Sorting and Spatial Wage Inequality