TY  - RPRT
        AU  - Böhm, Michael Johannes
AU  - Etheridge, Ben
AU  - Irastorza-Fadrique, Aitor
        TI  - The Impact of Labour Demand Shocks when Occupational Labour Supplies are Heterogeneous
        PY  - 2025/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17851
        UR  - https://www.iza.org/publications/dp17851
        AB  - As technological advances accelerate and labour demands shift, the ability of workers to reallocate across occupations will be crucial for shaping labour market dynamics, inequality, and effective policy design. In this paper, we develop a tractable equilibrium model of the labour market that incorporates heterogeneous labour supply elasticities to different occupations and across different occupation pairs. Using worker flows from German administrative data, we estimate these elasticities and validate them through external measures such as  occupational licensing and task distance. Our model quantifies the heterogeneous impacts of recent labour demand shifts on occupational wages and employment, highlighting the role of cross-occupation effects in shaping market responses to shocks. Finally, we leverage this framework to project employment flows and wage adjustments under future occupational demand shifts that are implied by the latest automation technologies.
        KW  - labour demand shocks
KW  - occupational substitutability
KW  - future projections
KW  - heterogeneous labour supply elasticities
KW  - automation technologies
KW  - german panel data
KW  - job flows
KW  - occupational employment and wages
KW  - automation technologies
KW  - future projections
        ER  -