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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.

Suggested Citation

  • Shintaro Yamaguchi, 2009. "Career Progression and Comparative Advantage," Global COE Hi-Stat Discussion Paper Series gd08-025, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:ghsdps:gd08-025
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    File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd08-025.pdf
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. 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, February.
    4. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-192, February.
    5. 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.
    6. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-261, April.
    7. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-1120, December.
    8. Jovanovic, Boyan & Nyarko, Yaw, 1997. "Stepping-stone mobility," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 46(1), pages 289-325, June.
    9. 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.
    10. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
    11. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
    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, January.
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    Citations

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    Cited by:

    1. 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.
    2. Kate Antonovics & Limor Golan, 2012. "Experimentation and Job Choice," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 333-366.
    3. repec:bla:ecinqu:v:55:y:2017:i:2:p:1064-1090 is not listed on IDEAS
    4. Okumura Tsunao & Usui Emiko, 2014. "Do Parents’ Social Skills Influence Their Children’s Sociability?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 1-36, July.
    5. repec:bla:ecorec:v:93:y:2017:i::p:86-104 is not listed on IDEAS
    6. Shintaro Yamaguchi, 2012. "Tasks and Heterogeneous Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 1-53.
    7. Christina Gathmann & Uta Schönberg, 2010. "How General Is Human Capital? A Task-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 1-49, January.
    8. Chris Robinson, 2011. "Occupational Mobility, Occupation Distance and Specific Human Capital," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20115, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    9. Carl Sanders & Christopher Taber, 2012. "Life-Cycle Wage Growth and Heterogeneous Human Capital," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 399-425, July.
    10. repec:bla:indres:v:56:y:2017:i:3:p:393-410 is not listed on IDEAS

    More about this item

    Keywords

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

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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