The technological origins of the decline in labor market dynamism
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- dc.contributor.author Eeckhout, Jan
- dc.contributor.author Weng, Xi
- dc.date.accessioned 2025-06-13T13:50:10Z
- dc.date.available 2025-06-13T13:50:10Z
- dc.date.issued 2024
- dc.date.updated 2025-06-13T13:50:10Z
- dc.description.abstract In the last decades, there has been a marked decline in the job flows to and from unemployment and between employment. We ask whether and how technological change can account for his secular decline in labor market dynamism. We propose a theory that focuses on the determinants of technology broadly defined: 1. the complementarity between worker skill and firm productivity; and 2. the volatility in productivity shocks; and 3. search frictions. We derive job flows in a sorting model with search frictions and endogenous search effort both on and off the job, as well as shocks that lead to mismatch. We quantify our model using the US data and find an increase in the complementarity between labor and technology, a decline in the frequency and volatility of productivity shocks, and a decline in the match efficiency as well as an increase in the search costs. The changing nature of these features of the technology contributes to the secular decline in labor market dynamism.
- dc.description.sponsorship Eeckhout acknowledges support from the ERC, Grant 339186, and from ECO2015-67655-P. Weng acknowledges support from the National Natural Science Foundation of China (Grant Nos. 72192843 and 72225001).
- dc.format.mimetype application/pdf
- dc.identifier.citation Eeckhout J, Weng X. The technological origins of the decline in labor market dynamism. J Econ Dyn Control. 2024;169:104962. DOI: 10.1016/j.jedc.2024.104962
- dc.identifier.doi http://dx.doi.org/10.1016/j.jedc.2024.104962
- dc.identifier.issn 0165-1889
- dc.identifier.uri http://hdl.handle.net/10230/70686
- dc.language.iso eng
- dc.publisher Elsevier
- dc.relation.ispartof Journal of Economic Dynamics and Control. 2024;169:104962
- dc.relation.projectID info:eu-repo/grantAgreement/EC/FP7/339186
- dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/ECO2015-67655-P
- dc.rights © 2025 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/4.0/
- dc.subject.keyword Sorting
- dc.subject.keyword Declining labor market dynamism
- dc.subject.keyword Job flows
- dc.subject.keyword Labor reallocation
- dc.subject.keyword Complementarities
- dc.subject.keyword Technological change
- dc.title The technological origins of the decline in labor market dynamism
- dc.type info:eu-repo/semantics/article
- dc.type.version info:eu-repo/semantics/publishedVersion