This paper investigates whether employers exploit cyclical downturns to improve the average skill level of their work force. We use a unique dataset that contains information on workers, jobs as well as firm characteristics. Our findings are that at each job level mainly lower educated workers leave during downturns. Furthermore, at each level of job complexity, workers with a higher education are not more productive than lower educated workers. We find no evidence that higher educated workers crowd out lower educated workers during recessions.

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European Economic Review
Tinbergen Institute

Gautier, P.A, van den Berg, G.J, van Ours, J.C, & Ridder, G. (2002). Worker turnover at the firm level and crowding out of lower educated workers. European Economic Review, 46(3), 523–538. doi:10.1016/S0014-2921(01)00140-4