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Career Progression and Comparative Advantage

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  • Shintaro Yamaguchi

Abstract

This paper constructs and structurally estimates a dynamic model of occupational choice where all occupations are characterized in a continuous multidimensional space of skill requirement using the data from the Dictionary of Occupational Titles and the NLSY79. This skill space approach allows the model to include hundreds of occupations at the three-digit census classification level without a large number of parameters. Thereby it provides more detailed analysis of occupations than previous papers. Parameter estimates indicate that skill demanding occupations offer higher returns to education and experience, which results in occupational sorting. They also suggest that the estimated skill prices by the OLS are severely biased due to this sorting.

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File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd08-025.pdf
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Bibliographic Info

Paper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd08-025.

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Date of creation: Jan 2009
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Handle: RePEc:hst:ghsdps:gd08-025

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Keywords: Occupational choice; occupational sorting; human capital; skills; structural estimation;

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  1. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
  2. Derek Neal, 1998. "The Complexity of Job Mobility Among Young Men," NBER Working Papers 6662, National Bureau of Economic Research, Inc.
  3. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-120, December.
  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. Ronni Pavan, 2006. "Career Choice and Wage Growth," 2006 Meeting Papers 504, Society for Economic Dynamics.
  6. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Specificity Of Human Capital," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 63-115, 02.
  7. Oded Galor & Nachum Sicherman, 1988. "A Theory of Career Mobility," University of Chicago - George G. Stigler Center for Study of Economy and State 51, Chicago - Center for Study of Economy and State.
  8. 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.
  9. 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.
  10. 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.
  11. Boyan Jovanovic & Yaw Nyarko, 1996. "Stepping Stone Mobility," NBER Working Papers 5651, National Bureau of Economic Research, Inc.
  12. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
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Cited by:
  1. Okumura, Tsunao & Usui, Emiko, 2010. "Do Parents' Social Skills Influence Their Children's Sociability?," PIE/CIS Discussion Paper 466, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  2. Shintaro Yamaguchi, 2012. "Tasks and Heterogeneous Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 1 - 53.
  3. 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.
  4. 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.

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