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  4. May 2021
  5. Pure-Chance Jobs versus a Labor Market: The Impact on Careers of a Random Serial Dictatorship for First Job Seekers

Pure-Chance Jobs versus a Labor Market: The Impact on Careers of a Random Serial Dictatorship for First Job Seekers

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Abstract

Do workers' first jobs affect their careers? Do such first-job effects (FJEs) vary across worker types? If so, can policy improve upon a "free" labor market by altering initial worker-employer matches? We study these questions using Norway's pre–2013 system of assigning doctors to their first job—residencies—through a random serial dictatorship. This generated individual-level variation in workers' choice sets over employers, which we use as instrumental variables to estimate FJEs. We then decompose workers' preferences over first employers into FJEs-on-earnings and employer "amenity value" components, showing how matches and worker welfare changed in the post–2013 decentralized labor market.

Citation

Arora, Ashna, Leonard Goff, and Jonas Hjort. 2021. "Pure-Chance Jobs versus a Labor Market: The Impact on Careers of a Random Serial Dictatorship for First Job Seekers." AEA Papers and Proceedings, 111: 470-75. DOI: 10.1257/pandp.20211010

Additional Materials

JEL Classification

  • J41 Labor Contracts
  • J44 Professional Labor Markets; Occupational Licensing
  • I11 Analysis of Health Care Markets