This presentation illustrates the use of a job chains model to analyze the effects of new employment in the local economy. This is an analytical tool for estimating the effects of employment change in the local labor market. It is grounded in the simple fact that new jobs generate a chain-like sequence in local labor markets. The job chains model estimates all the subsequent vacancies generated by a new job and the welfare effects that accrue as new jobs are created. When a new job taker vacates an existing position, a chain of vacancies is set in motion. This is only truncated when a vacancy is occupied by a worker who does not leave any replacement in the labor market, such as a first-time entrant, an unemployed worker or a migrant.
This simple model can be used to analyze many local labor market situations: the arrival of a new firm, the impacts of targeting of particular population groups etc. In particular, the job chains approach allows the analyst to move beyond simply counting jobs and to deal with questions of welfare and equity, job quality and income distribution:
-Does creating jobs for the rich open up opportunities for the poor?
-Do jobs in high tech set of chains in other sectors?
-Is labor mobility easier in large or smaller firms?
-Is there a gender bias in job creation: do ‘male’- type jobs open up opportunities for females and vice versa?
-Does job creation in one region trickle through to other regions?
The mechanics of the job chains model will be outlined. The data needs of such an exercise will be discussed and worked empirical examples will show how this approach can be operationalized in many different contexts.
JOB CHAINS AND WAGE CURVES: WORKER MOBILITY AND MARSHALLIAN SURPLUSES IN EVALUATING REGIONAL EMPLOYMENT GROWTH - Joseph Persky & Daniel Felsenstein