The underemployment trap

• 成果类型: Article
• 署名作者: Duan, Jie; Jackson, Paul
• 署名单位: Zhejiang University; National University of Singapore
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2024.103633
• 发表日期: 2025
• 关键词: Underemployment; duration dependence; unobserved heterogeneity; human capital

摘要

Many college graduates are underemployed, i.e., work in occupations that do not require a college degree. We document that underemployed workers are less likely to transition to a college occupation the longer they are underemployed and that longer underemployment histories are associated with lower wages in college occupations. To explain these findings, we develop a directed search model with unobserved heterogeneity, occupation-specific human capital, and on the job search. Workers are uncertain about their suitability for college jobs and learn through search. Underemployment is generated by search and information frictions, as workers with a low expected job finding probability in college occupations self-select into underemployment. Once underemployed, workers' college occupation-specific human capital decays. A quantitative decomposition shows that unobserved heterogeneity explains most of the duration dependence in underemployment.