Macroeconomic Effects of Job Reallocations: A Survey

Gallipoli, Giovanni ; Pelloni, Gianluigi (2013) Macroeconomic Effects of Job Reallocations: A Survey. Bologna: Dipartimento di Scienze economiche, p. 50. DOI 10.6092/unibo/amsacta/3733. In: Quaderni - Working Paper DSE (897). ISSN 2282-6483.
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This paper critically appraises the approaches that have characterized the literature on the macroeconomic effects of job reallocations. Since Lilien's (1982) seminal contribution there has been a flourishing of empirical analysis but no unifying theoretical framework has obtained consensus in the scientific debate. We face a corpus of research which is heterogeneous in variables' selection and experimental design. This heterogeneity makes the evaluation of results a daunting task. As a guiding principle for our excursion we track down the methodological development of the solutions to the crucial problem of observational equivalence of aggregate and sectoral reallocation shocks. We draw two main conclusions from our analysis. The first is that the non-directional nature of reallocation shocks holds the key to the solution of the fundamental identification problem. In this sense the recent perspective on job creation and destruction shows much promise. The second conclusion is that sectoral reallocation of labor has been responsible for no less that 1/4 and no more that 2/3 of the variance of aggregate unemployment in postwar data. While this range may seem wide it is an indication that the importance of labor reallocation may have changed over time, being quite large at particular historical junctures.

Document type
Monograph (Working Paper)
Gallipoli, Giovanni
Pelloni, Gianluigi
labor reallocation, unemployment, sectoral shifts, methodology, assessment
Deposit date
30 Jul 2013 10:22
Last modified
03 Oct 2013 08:54

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