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What Should I Be When I Grow Up? Occupations and Unemployment over the Life Cycle

Author

Listed:
  • Yaniv Yedid-Levi

    (The University of British Columbia)

  • Nir Jaimovich

    (Duke University)

  • Henry Siu

    (University of British Columbia)

  • Martin Gervais

    (University of Iowa)

Abstract
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.

Suggested Citation

  • Yaniv Yedid-Levi & Nir Jaimovich & Henry Siu & Martin Gervais, 2014. "What Should I Be When I Grow Up? Occupations and Unemployment over the Life Cycle," 2014 Meeting Papers 1153, Society for Economic Dynamics.
    • Handle: RePEc:red:sed014:1153
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    References listed on IDEAS

    as
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    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • J0 - Labor and Demographic Economics - - General

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