Seminar: Georg Duernecker, University of Mannheim, Germany

Title: Informational Frictions and the Life-Cycle Dynamics of Job Mobility.

This paper studies the life-cycle dynamics of individual job mobility. After entry into the labor market, young individuals typically change jobs very frequently and retain new jobs just for a short period of time. In later stages of their career, workers tend to hold stable jobs and they are substantially more likely to keep a new job than in the early years. This paper argues that the labor market experience individuals accumulate early in their career affects their job mobility in later stages. We construct a life-cycle model of the labor market whose main characteristic is an information imperfection in the matching process. The key ingredient is that the imperfection is assumed to be worker-specific and in particular it is linked to an individual's previous labor market history. We estimate the model by indirect inference on data from the NLSY 79 and find that it can capture very well the observed life-cycle profile of individual labor market mobility.