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Human Capital Mismatches along the Career Path

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Author Info

  • Ljubica Nedelkoska

    ()
    (Research Training Group "Economics of Innovative Change" at the Friedrich Schiller University Jena)

  • Frank Neffke

    ()
    (Erasmus School of Economics, Rotterdam)

Abstract

Human capital is transferable across occupations, but only to a limited extent because of differences in occupational skill-profiles. Higher skill overlap between occupations renders less of individuals' human capital useless in occupational switches. Current occupational distance measures neglect that differences in skill complexities between occupations yield skill mismatch asymmetric in nature. We propose characterizing occupational switches in terms of human capital shortages and redundancies. This results in superior predictions of individual wages and occupational switches. It also allows identifying career movements up and down an occupational complexity ladder, and assessing the usefulness of accumulated skill-profiles at an individual's current job.

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File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2010_051.pdf
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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2010-051.

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Date of creation: 24 Aug 2010
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Handle: RePEc:jrp:jrpwrp:2010-051

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Keywords: skill mismatch; skill transferability; occupational change; human capital; wages;

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  1. Ronni Pavan, 2011. "Career Choice and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 549 - 587.
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Cited by:
  1. Alina Sorgner & Michael Fritsch, 2013. "Occupational Choice and Self-Employment: Are They Related?," SOEPpapers on Multidisciplinary Panel Data Research 533, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Sorgner, Alina & Fritsch, Michael, 2013. "Stepping Forward: Personality Traits, Choice of Profession, and the Decision to Become Self-Employed," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79768, Verein für Socialpolitik / German Economic Association.
  3. Elisabeth Bublitz & Florian Noseleit, 2011. "The Skill Balancing Act: Determinants of and Returns to Balanced Skills," Jena Economic Research Papers 2011-025, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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