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Empirical Analysis of Occupational Hierarchies

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  • Christopher Ferrall

Abstract

Using data on U.S. engineers and the position of engineering jobs within firms, this paper estimates a model of hierarchies within firms. The model extends Rosen's (1982) model of recursive production to two skills and multiple hierarchy levels. The model generates an empirical model that is nested within a general Roy (1951) model of self-selection. Maximum likelihood estimates of the parameters of the production technology and the skill-experience profiles are estimated. The results suggest that approximately two-thirds of changes in employment shares across hierarchy levels across time are explained by demographic shifts in the stock of engineering skills. Most of the returns to experience and to assignment to higher hierarchy levels within firms are caused by skill accumulation and self-selection rather than technological differences across hierarchy levels.

Suggested Citation

  • Christopher Ferrall, 1997. "Empirical Analysis of Occupational Hierarchies," Journal of Human Resources, University of Wisconsin Press, vol. 32(1), pages 1-34.
  • Handle: RePEc:uwp:jhriss:v:32:y:1997:i:1:p:1-34
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    Cited by:

    1. B. Kriechel & G. A. Pfann, 2013. "Workforce reorganization and the worker," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1719-1729, May.
    2. Naderi, A. & Mace, J., 2003. "Education and earnings: a multilevel analysis: A case study of the manufacturing sector in Iran," Economics of Education Review, Elsevier, vol. 22(2), pages 143-156, April.
    3. Natalia Mishagina, 2007. "Empirical Analysis of Career Transitions of Sciences and Engineering Doctorates in the US," Working Papers 1137, Queen's University, Department of Economics.
    4. Patrick Kehoe & V.V. Chari, 2010. "Bailouts, Time Inconsistency, and Optimal Regulation," 2010 Meeting Papers 527, Society for Economic Dynamics.
    5. Felipe Balmaceda, "undated". "Compensation Methods in Competitive Labor Markets," ILADES-Georgetown University Working Papers inv118, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
    6. Jeremy T. Fox, 2009. "Firm-Size Wage Gaps, Job Responsibility, and Hierarchical Matching," Journal of Labor Economics, University of Chicago Press, vol. 27(1), pages 83-126, January.
    7. Chen, Jiawei & Shum, Matthew, 2010. "Estimating a tournament model of intra-firm wage differentials," Journal of Econometrics, Elsevier, vol. 155(1), pages 39-55, March.
    8. Hina Nazli, 2004. "The Effect of Education, Experience and Occupation on Earnings: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 9(2), pages 1-30, Jul-Dec.
    9. Felipe Balmaceda, 2002. "Compensation Methods in a Competitive Labor Market: the Role of Asymmetric Information," Documentos de Trabajo 139, Centro de Economía Aplicada, Universidad de Chile.

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