Misallocation and Inequality

Guner, Nezih

doi:10.2139/ssrn.4114734

SSRN Journal

2022

DOI: 10.2139/ssrn.4114734

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Misallocation and Inequality

Nezih Guner

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Cited by 3 publications

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The role of labor market frictions in structural transformation*

Donovan,

Schoellman

2023

Oxford Development Studies

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The role of labor market frictions in structural transformation*

Donovan,

Schoellman

2023

Oxford Development Studies

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Human Capital Investment and Development: The Role of On-the-Job Training

Ma,

Nakab,

Vidart

2024

Journal of Political Economy Macroeconomics

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This paper offers an explanation for why workers in richer countries have faster rates of wage growth over their lifetimes than workers in poorer countries by providing theory and evidence on the differences in firm-provided training across countries. We document that the share of workers who receive firm-provided training increases with development, and that this is a key determinant of worker human capital investments.We then build a general equilibrium search model with firm-training investments and frictional labor markets. Our model suggests firm-training accounts for a large share of the cross-country wage growth differences. We find that self-employment is the key factor explaining the lack of training in the poorest economies, whereas labor market frictions are key to explaining training differences as countries develop. Finally, our model predicts considerable inefficiencies in human capital investments and sizeable aggregate gains from training subsidies to firms, which may be particularly desirable in poor countries where economic environments disincentivize training.

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Labor Market Dynamics and Development

Donovan

Lu²,

Schoellman

2023

The Quarterly Journal of Economics

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We provide new evidence on how labor market dynamics vary with development. We build a new dataset consisting of harmonized microdata from rotating panel labor force surveys covering 80 million people from 49 countries. Labor market flows, such as the job-finding or employment exit rate, are higher in developing countries. These higher flows largely reflect a slippery job ladder: workers transition frequently to and from marginal employment without climbing to or persisting in better-paying jobs. Subsistence self-employment and different patterns of selection for wage workers each play a role in our findings and are useful avenues for future theories of labor market frictions.

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Misallocation and Inequality

Cited by 3 publications

References 55 publications

The role of labor market frictions in structural transformation*

The role of labor market frictions in structural transformation*

Human Capital Investment and Development: The Role of On-the-Job Training

Labor Market Dynamics and Development

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