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Cyclical Occupational Choice in a Model with Rational Wage Expectations and Perfect Occupational Mobility

Author

Listed:
  • Felderer, Bernhard

    (Institute for Advanced Studies, Vienna)

  • Drost, André

    (Department of Economics, University of Cologne)

Abstract

In many professional labor markets the number of new workers follows a cyclical time path. This phenomenon is usually explained by means of a cobweb model that is based on the assumptions of myopic wage expectations and occupational immobility. Since both assumptions are questioned by the empirical literature, we develop an alternative model that is based on the assumptions of rational wage expectations and perfect occupational mobility. Depending on the production function, the model can generate cycles in the number of workers who enter a professional labor market.

Suggested Citation

  • Felderer, Bernhard & Drost, André, 2000. "Cyclical Occupational Choice in a Model with Rational Wage Expectations and Perfect Occupational Mobility," Economics Series 81, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihsesp:81
    as

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    File URL: https://irihs.ihs.ac.at/id/eprint/1256
    File Function: First version, 2000
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    References listed on IDEAS

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    Cited by:

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    2. Magali Jaoul-Grammare, 2006. "Cliométrie de l’engorgement en France. Evaluation théorique et empirique," Working Papers 06-07, Association Française de Cliométrie (AFC).

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    More about this item

    Keywords

    Occupational choice; Rational expectations; Occupational mobility; Linear dynamics;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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