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Career progression and comparative advantage

  • Yamaguchi, Shintaro

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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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
Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

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  1. Ronni Pavan, 2006. "Career Choice and Wage Growth," 2006 Meeting Papers 504, Society for Economic Dynamics.
  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. 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.
  4. 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.
  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. Jovanovic, Boyan & Nyarko, Yaw, 1997. "Stepping-stone mobility," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 46(1), pages 289-325, June.
  7. 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.
  8. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
  9. Michael P. Keane & Kenneth I. Wolpin, 1995. "The career decisions of young men," Working Papers 559, Federal Reserve Bank of Minneapolis.
  10. 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.
  11. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-120, December.
  12. 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.
  13. 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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