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Career progression and comparative advantage

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  • Yamaguchi, Shintaro

Abstract

This paper constructs and estimates a structural dynamic model of occupational choice in which all occupations are characterized in a skill requirement space using data from the Dictionary of Occupational Titles and the NLSY79. This skill requirement space approach has its merit in computational simplicity as well as ease of interpretation: it allows the model to include hundreds of occupations at the three-digit census classification level without a large number of parameters. Parameter estimates indicate that wages grow with the skill requirements of an occupation and that educated and experienced individuals are better rewarded in a cognitive and interpersonal skill demanding occupation. They also suggest that ignoring self-selection into occupations and individual heterogeneity may result in counter-intuitive and biased estimates of the returns to skill requirements.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 17 (2010)
Issue (Month): 4 (August)
Pages: 679-689

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Handle: RePEc:eee:labeco:v:17:y:2010:i:4:p:679-689

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Occupational choice Occupational sorting Human capital Skills Structural estimation;

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References

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  1. Michael P. Keane & Kenneth I. Wolpin, 1995. "The career decisions of young men," Working Papers 559, Federal Reserve Bank of Minneapolis.
  2. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
  3. Jovanovic, Boyan & Nyarko, Yaw, 1997. "Stepping-stone mobility," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 46(1), pages 289-325, June.
  4. Shintaro Yamaguchi, 2007. "The Effect of Match Quality and Specific Experience on Career Decisions and Wage Growth," Department of Economics Working Papers 2007-01, McMaster University.
  5. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-61, April.
  6. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-120, December.
  7. Iourii Manovskii & Gueorgui Kambourov, 2004. "Occupational Specificity of Human Capital," 2004 Meeting Papers 197, Society for Economic Dynamics.
  8. Ronni Pavan, 2011. "Career Choice and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 549 - 587.
  9. Kathryn L. Shaw, 1984. "A Formulation of the Earnings Function Using the Concept of Occupational Investment," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 319-340.
  10. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-92, February.
  11. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, 01.
  12. Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
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Cited by:
  1. Chris Robinson, 2011. "Occupational Mobility, Occupation Distance and Specific Human Capital," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20115, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  2. Yamaguchi, Shintaro, 2010. "The effect of match quality and specific experience on career decisions and wage growth," Labour Economics, Elsevier, vol. 17(2), pages 407-423, April.
  3. Okumura, Tsunao & Usui, Emiko, 2010. "Do Parents' Social Skills Influence Their Children's Sociability?," IZA Discussion Papers 5324, Institute for the Study of Labor (IZA).
  4. Shintaro Yamaguchi, 2012. "Tasks and Heterogeneous Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 1 - 53.

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