Employer Learning and the “Importance” of Skills
We ask whether the role of employer learning in the wage-setting process depends on skill type and skill importance to productivity. Combining data from the NLSY79 with O*NET data, we use Armed Services Vocational Aptitude Battery scores to measure seven distinct types of pre-market skills that employers cannot readily observe, and O*NET importance scores to measure the importance of each skill for the worker’s current three-digit occupation. Before bringing importance measures into the analysis, we find evidence of employer learning for each skill type, for college and high school graduates, and for blue and white collar workers. Moreover, we find that the extent of employer learning—which we demonstrate to be directly identified by magnitudes of parameter estimates after simple manipulation of the data—does not vary significantly across skill type or worker type. Once we allow parameters identifying employer learning and screening to vary by skill importance, we find evidence of distinct tradeoffs between learning and screening, and considerable heterogeneity across skill type and skill importance. For some skills, increased importance leads to more screening and less learning; for others, the opposite is true. Our evidence points to heterogeneity in the degree of employer learning that is masked by disaggregation based on schooling attainment or broad occupational categories.
|Date of creation:||Oct 2011|
|Date of revision:|
|Contact details of provider:|| Postal: 410 Arps Hall 1945 North High Street Columbus, Ohio 43210-1172|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas J. Kane & Cecilia Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," Working Papers 798, Princeton University, Department of Economics, Industrial Relations Section..
- Hani Mansour, 2010.
"Does Employer Learning Vary by Occupation?,"
Discussion Papers of DIW Berlin
1015, DIW Berlin, German Institute for Economic Research.
- Peter Arcidiacono & Patrick Bayer & Aurel Hizmo, 2008.
"Beyond Signaling and Human Capital: Education and the Revelation of Ability,"
NBER Working Papers
13951, National Bureau of Economic Research, Inc.
- Peter Arcidiacono & Patrick Bayer & Aurel Hizmo, 2010. "Beyond Signaling and Human Capital: Education and the Revelation of Ability," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 76-104, October.
- Patrick J. Bayer & Peter Arcidiacono & Aurel Hizmo, 2010. "Beyond Signaling and Human Capital: Education and the Revelation of Ability," Working Papers 10-51, Duke University, Department of Economics.
- Joshua C. Pinkston, 2006. "A Test of Screening Discrimination with Employer Learning," ILR Review, Cornell University, ILR School, vol. 59(2), pages 267-284, January.
- Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 1-35.
- Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1007-1047.
- Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
- repec:pri:indrel:419 is not listed on IDEAS
- Joshua C. Pinkston, 2009.
"A Model of Asymmetric Employer Learning with Testable Implications,"
Review of Economic Studies,
Oxford University Press, vol. 76(1), pages 367-394.
- Joshua C. Pinkston, 2006. "A Model of Asymmetric Employer Learning With Testable Implications," Working Papers 390, U.S. Bureau of Labor Statistics.
- Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
- Flores-Lagunes, Alfonso & Light, Audrey, 2009.
"Interpreting Degree Effects in the Returns to Education,"
IZA Discussion Papers
4169, Institute for the Study of Labor (IZA).
- Alfonso Flores-Lagunes & Audrey Light, 2010. "Interpreting Degree Effects in the Returns to Education," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
When requesting a correction, please mention this item's handle: RePEc:osu:osuewp:11-02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John Slaughter)
If references are entirely missing, you can add them using this form.