AN ESTIMATE OF A SECTORAL MODEL OF LABOR MOBILITY

Develops a model of sectoral labor mobility and tests its main implications. The model nests two distinct hypotheses on the origin of mobility: sectoral shocks; and worker-employer mismatch. We estimate the relative importance of each hypothesis and find that the bulk of labor mobility is caused by mismatch rather than by sectoral shift. We then try to put a value on society's match-specific information. We find that the mobility option raises expected earnings by roughly between 8.5% and 13% of labor earnings, which translates to an increase in GNP of between 6% and 9%. -from Authors