brown bag Travail et Économie Publique

Du 05/12/2024 de 12:30 à 13:30

PSE- 48 boulevard Jourdan, 74014 Paris, salle R1-09

BEHAGHEL Luc (PSE)

The Impact of Retraining Programs on Firms' Labor Demand and Occupational Mobility

We investigate the value of retraining programs in facilitating the mobility of workers into occupations in high demand. By sending 5,000 fictitious job applications to firms posting ads in six tight labor market occupations, we randomly vary the candidates' training and experience to compare labor demand for four profiles, all aged 21: an textit{incumbent} with both initial training and experience in the posted occupation, and three movers who initially trained and worked in a neighboring, tighter occupation. The movers differ by the extent of retraining they have undergone for the target occupation. Callback rates vary significantly, with the incumbent receiving the highest callbacks, closely followed by the long-retraining mover who underwent several weeks or months of retraining (59% and 51% callback rates, respectively). Untrained movers and short-retraining movers have significantly lower callback rates (30%). We observe notable heterogeneity across occupations, with long retraining yielding much more limited returns in some. We develop and test a matching model, predicting that the effect of retraining on callbacks should increase and then decrease with labor market tightness. Using variation in tightness within occupations, we find that even in the tight labor markets studied, the effect of retraining on callbacks continues to increase with rising tightness.