IDEAS home Printed from https://ideas.repec.org/p/red/sed007/729.html
   My bibliography  Save this paper

Career and Skill Formation: A Dynamic Occupational Choice Model With Multidimensional Skills

Author

Listed:
  • Shintaro Yamaguchi

    (McMaster University)

Abstract

The objective of the paper is to construct and estimate a dynamic structural model of schooling and occupational choice at the three-digit classification level, in which different occupations involve different mix of tasks. In the model, occupations are characterized by complexity of various tasks. Unlike occupational specific human capital, skills used in one occupation help a worker to enter a new occupation, depending on the similarity of the tasks of the two. Individuals build up their skills in low-paying occupations that provide relevant experience before they enter a high-paying occupation. Hence, low skill occupations can be viewed as “stepping stone” to better occupations. The structural parameters of the model are estimated using the occupational characteristics in the Dictionary of Occupational Titles and the work history in the National Longitudinal Survey of Youth 79. I find that the model does a good job of fitting the data on occupational choices: individuals gradually move from low-skill occupations to high-skill occupations.

Suggested Citation

  • Shintaro Yamaguchi, 2007. "Career and Skill Formation: A Dynamic Occupational Choice Model With Multidimensional Skills," 2007 Meeting Papers 729, Society for Economic Dynamics.
    • Handle: RePEc:red:sed007:729
    as

    Download full text from publisher

    File URL: https://red-files-public.s3.amazonaws.com/meetpapers/2007/paper_729.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Heckman, James J & Lochner, Lance & Taber, Christopher, 1998. "Tax Policy and Human-Capital Formation," American Economic Review, American Economic Association, vol. 88(2), pages 293-297, May.
    2. Ronni Pavan, 2011. "Career Choice and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 549-587.
    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. 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.
    5. Donghoon Lee, 2005. "An Estimable Dynamic General Equilibrium Model Of Work, Schooling, And Occupational Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 1-34, February.
    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. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1007-1047.
    8. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-1120, December.
    9. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
    10. Taber Christopher, 2002. "Tax Reform and Human Capital Accumulation: Evidence from an Empirical General Equilibrium Model of Skill Formation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-38, October.
    11. Jovanovic, Boyan & Nyarko, Yaw, 1997. "Stepping-stone mobility," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 46(1), pages 289-325, June.
    12. 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.
    13. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
    14. Robert Gibbons & Lawrence F. Katz & Thomas Lemieux & Daniel Parent, 2005. "Comparative Advantage, Learning, and Sectoral Wage Determination," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 681-724, October.
    15. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352-352.
    16. Gathmann, Christina & Schönberg, Uta, 2006. "How General Is Specific Human Capital?," IZA Discussion Papers 2485, Institute of Labor Economics (IZA).
    17. Marigee Bacolod & Bernardo S. Blum, 2005. "Two Sides of the Same Coin: U.S. "Residual" Inequality and the Gender Gap," Working Papers 050617, University of California-Irvine, Department of Economics.
    18. 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.
    19. Rubinstein, Yona & Weiss, Yoram, 2006. "Post Schooling Wage Growth: Investment, Search and Learning," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 1, pages 1-67, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Shintaro Yamaguchi, 2012. "Tasks and Heterogeneous Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 1-53.
    3. Yamaguchi, Shintaro, 2010. "Career progression and comparative advantage," Labour Economics, Elsevier, vol. 17(4), pages 679-689, August.
    4. Paul Sullivan, 2010. "A Dynamic Analysis Of Educational Attainment, Occupational Choices, And Job Search," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(1), pages 289-317, February.
    5. Fatih Guvenen & Burhan Kuruscu & Satoshi Tanaka & David Wiczer, 2020. "Multidimensional Skill Mismatch," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 210-244, January.
    6. Gathmann, Christina & Schönberg, Uta, 2006. "How General Is Specific Human Capital?," IZA Discussion Papers 2485, Institute of Labor Economics (IZA).
    7. Aspen Gorry, 2016. "Experience and worker flows," Quantitative Economics, Econometric Society, vol. 7(1), pages 225-255, March.
    8. Ma, Jie, 2020. "High skilled immigration and the market for skilled labor: The role of occupational choice," Labour Economics, Elsevier, vol. 63(C).
    9. Shintaro Yamaguchi, 2010. "Job Search, Bargaining, and Wage Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 595-631, July.
    10. 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.
    11. Pedros Silos & Eric Smith, 2015. "Human Capital Portfolios," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(3), pages 635-652, July.
    12. Adda & Dustmann, 2004. "Career Progression and Formal versus on the Job Training," Econometric Society 2004 North American Winter Meetings 492, Econometric Society.
    13. Zsolt Csáfordi & László Lőrincz & Balázs Lengyel & Károly Miklós Kiss, 2020. "Productivity spillovers through labor flows: productivity gap, multinational experience and industry relatedness," The Journal of Technology Transfer, Springer, vol. 45(1), pages 86-121, February.
    14. Sullivan, Paul, 2010. "Empirical evidence on occupation and industry specific human capital," Labour Economics, Elsevier, vol. 17(3), pages 567-580, June.
    15. Kate Antonovics & Limor Golan, 2012. "Experimentation and Job Choice," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 333-366.
    16. Semih Tumen, 2017. "Career choice and the strength of weak ties," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 17(3), pages 1-91–97.
    17. Carl Sanders, 2012. "Skill Uncertainty, Skill Accumulation, and Occupational Choice," 2012 Meeting Papers 633, Society for Economic Dynamics.
    18. Keane, Michael P. & Todd, Petra E. & Wolpin, Kenneth I., 2011. "The Structural Estimation of Behavioral Models: Discrete Choice Dynamic Programming Methods and Applications," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 4, pages 331-461, Elsevier.
    19. Xin Jin, 2014. "The Signaling Role of Not Being Promoted: Theory and Evidence," Working Papers 0314, University of South Florida, Department of Economics.
    20. Jonathan James, 2011. "Ability matching and occupational choice," Working Papers (Old Series) 1125, Federal Reserve Bank of Cleveland.

    More about this item

    JEL classification:

    • 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
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed007:729. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.