We are pleased to invite you to the seminar series on “Macroeconomics and Labor Markets“ organized by the Chair of Macroeconomics at the Friedrich-Alexander University Erlangen-Nuremberg, Prof. Merkl, the Chair of Global Governance and International Trade at the Friedrich-Alexander University Erlangen-Nuremberg, Prof. Moser, and the Competence Field Macroeconomics of the Institute for Employment Research (IAB). Researchers of both institutions, as well as national and international guests, present their current work at the intersection of labor- and macroeconomics.
The next seminar will be held on Tuesday, July 7, from 12:00 noon to 13:30 (German time).
It will take place in-person in room LG 4.154 at WISO (Lange Gasse 20, Nürnberg).
You can also join online via Zoom.
Philip Jung (Technische Universität Dortmund) will talk about “Employment Protection, Worker Mobility, and Endogenous Growth“.
Abstract:
We characterize optimal labor-market policy in a multi-sector economy that joins endogenous growth, frictional worker reallocation, and human-capital accumulation on an input–output network. Our growth engine is portable human capital: within-match training lifts the economy’s growth frontier, but because trained skill is carried into unemployment and priced in the worker’s outside option, it compresses the bilateral surplus that funds job creation. In contrast to productivity differences across sectors differences in growth potential push labor out of the higher-growth sector. The model speaks at once to the human-capital and diffusion theory of growth and the recent growth-through reallocation literature. To correct for worker-stealing and incumbent-match externalities – similar to those in Fukui and Mukoyama, 2025 in a growth context – the social planner needs to use a complex system of hiring, firing, training, on the-job search, unemployed switching, and schooling taxes/subsidies that we characterize. We find that if on-the-job search merely reshuffles workers the planner subsidizes separations and taxes hiring; when mobility instead builds portable skill, the prescriptions reverse. The framework delivers a unified, network-aware account of when worker mobility is socially valuable and how employment-protection policy might respond in a theory of second best.