Job Search Model

Went to a fairly interesting seminar last week. The presentation was on career switching, although it was really a career/job ladder model in which those who are more talented move up and those who are less talented move down. Matches the career switching data (at least in Denmark) although for me it raises the question of what the difference is between a job and a career. Successful engineers moving up to management (of other engineers) have switched careers in this model.

It seems to me that a model that is more successful in describing reality would have two dimensions. One dimension would be the "fit" of a job for a particular individual. That is, each individual has different interests and skills which will be matched differently by different (jobs? careers? occupations?) fields. Some will be math people, some medicine people, some construction people, etc. Young people just entering the labor force may have some idea what fits them best, but they learn a lot as they hold different jobs.

The second dimension would be a vertical dimension in which more capable people move up the ladder (in the field). The key would be that moving up the ladder would be a function both of overall ability (independent of field), but also the "fit" in the particular field.

If I went into the art field I might be allowed to clean the brushes, even if I have a reasonably high overall ability, because the field is such a bad fit for me. If I decided to teach math, I could probably rise to a semi-successful high school teacher. If I want to teach and research economics, perhaps I can rise a little higher because it's a better fit for me.

So how to do it? Well, each agent would have to have two describing statistics: field and ability. Let's say they're distributed between 0 and 1. The field could be a circle (i.e. it doesn't need to have a max and min). Say there are fields (each with one firm) distributed evenly around a Salope circle. Each has a ladder representing higher paying jobs in the field. The wage would then be a function both of the fit of the field and of ability.

Agents may or may not have any information about their field and ability when entering the labor market. After each job they learn more about each of those statistics, as do their employers. They (and their employers) have the option to move them up, move them down, keep them steady, or institute a search for a new field. If there's enough uncertainty and job search costs are high enough, most people will stay put. Those who have a good fit on the field but are on the margins in terms of ability will move up or down. Those who have a bad fit in the field will either quit or be fired.

This paper may have already been written. I feel like I've seen something like this, but I don't remember the model.