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Generalists and Specialists, Ability and Earnings

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  • Sang-Hyop Lee

    () (Department of Economics, University of Hawaii at Manoa)

Abstract

The comparative advantage model developed in this paper predicts generalists enjoy a higher rate of return to their overall abilities than specialists, but they must also bear a penalty due to any imbalance in abilities. The predictions are tested using test scores data from the NLSY. The results show that individuals with balanced test scores across subjects are more likely to choose jobs in managerial, sales, and clerical occupations. In these occupations, individuals with more balanced test scores receive substantially higher earnings than those with unbalanced test scores. In contrast, individuals with highly unbalanced test scores are more likely to choose jobs in professional, craft, and operator occupations, although the extent of imbalance does not significantly affect earnings in these occupations.

Suggested Citation

  • Sang-Hyop Lee, 2005. "Generalists and Specialists, Ability and Earnings," Working Papers 200502, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:200502
    as

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_05-2.pdf
    File Function: First version, 2005
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    heterogeneous ability; occupational choice; cognitive skills; test scores;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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