Seminar in Empirical Microeconomics - Understanding the Effects of Labor Market Entry Conditions: The Role of Skill Match
Time
Thursday, 4. May 2023
12:00 - 13:15
Location
F428
Organizer
Junior Professorship in Labor Economics
Speaker:
Dita Eckardt (University of Warwick)
Understanding the Effects of Labor Market Entry Conditions: The Role of Skill Match
Abstract: Using administrative data on German workers trained in a specific occupation, this paper studies the role of skill match in driving the effects of labor market entry conditions. I show that higher entry unemployment does not affect graduates’ ability to find full- time employment but persistently reduces their wages and likelihood to work in their training occupation. Skill match can account for around 20% of the estimated wage effects. A conceptual framework sheds light on the underlying mechanisms. Lower levels of matching are costly but may arise from lower matching efficiency or in response to skill-specific shocks. Matches persist due to skill depreciation. The framework entails testable empirical predictions that I confirm using novel data on skill-specific unemployment and measures of training specificity. The findings point to long-term productivity effects from initial conditions and have important policy implications.