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The Costs of Occupational Mobility: An Aggregate Analysis

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  • Guido Matias Cortes

    () (Department of Economics, University of Manchester, UK; The Rimini Centre for Economic Analysis, Italy)

  • Giovanni Gallipoli

    () (University of British Columbia, Canada; HCEO, USA; The Rimini Centre for Economic Analysis, Italy)

Abstract

We estimate the costs of occupational mobility using a novel approach that relies on aggregate flows of workers across occupations rather than on wage data. The theoretical underpinnings for this approach are derived from a model of occupation choice that delivers a gravity equation linking worker flows to occupation characteristics and to transition costs, which we proxy using task data from the Dictionary of Occupational Titles (DOT). Occupation flow data are constructed from the matched monthly Current Population Survey (CPS) between 1994 and 2012. We find that transition costs vary widely across occupations, are increasing in task distance (the dissimilarity in the mix of tasks performed in the two occupations) and are higher for transitions across broad task categories. However, most of the transition costs are accounted for by general, task-independent entry costs, specific to each destination occupation.

Suggested Citation

  • Guido Matias Cortes & Giovanni Gallipoli, 2014. "The Costs of Occupational Mobility: An Aggregate Analysis," Working Paper series 17_14, Rimini Centre for Economic Analysis.
  • Handle: RePEc:rim:rimwps:17_14
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    References listed on IDEAS

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    1. 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.
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    3. Gervais, Martin & Jaimovich, Nir & Siu, Henry E. & Yedid-Levi, Yaniv, 2016. "What should I be when I grow up? Occupations and unemployment over the life cycle," Journal of Monetary Economics, Elsevier, vol. 83(C), pages 54-70.
    4. Guido Matias Cortes, 2016. "Where Have the Middle-Wage Workers Gone? A Study of Polarization Using Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 63-105.
    5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    6. Fane Groes & Philipp Kircher & Iourii Manovskii, 2015. "The U-Shapes of Occupational Mobility," Review of Economic Studies, Oxford University Press, vol. 82(2), pages 659-692.
    7. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    8. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
    9. Maxim Poletaev & Chris Robinson, 2008. "Human Capital Specificity: Evidence from the Dictionary of Occupational Titles and Displaced Worker Surveys, 1984-2000," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 387-420, July.
    10. Erhan Artuç & Shubham Chaudhuri & John McLaren, 2010. "Trade Shocks and Labor Adjustment: A Structural Empirical Approach," American Economic Review, American Economic Association, vol. 100(3), pages 1008-1045, June.
    11. Sullivan, Paul, 2010. "Empirical evidence on occupation and industry specific human capital," Labour Economics, Elsevier, vol. 17(3), pages 567-580, June.
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    Cited by:

    1. David Comerford & Jose V Rodriguez Mora & Michael J Watts, 2017. "The rise of meritocracy and the inheritance of advantage," Working Papers 1716, University of Strathclyde Business School, Department of Economics.
    2. Joao Alfredo Galindo da Fonseca & Giovanni Gallipoli & Yaniv Yedid-Levi, 2017. "Match Quality, Contractual Sorting and Wage Cyclicality," Working Papers 2017-076, Human Capital and Economic Opportunity Working Group.
    3. Jacob Wong, 2017. "Aggregate Reallocation Shocks, Occupational Employment and Distance," School of Economics Working Papers 2017-09, University of Adelaide, School of Economics.
    4. Brant Abbott & Giovanni Gallipoli, 2017. "Human Capital Spillovers and the Geography of Intergenerational Mobility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 208-233, April.
    5. Joao Alfredo Galindo da Fonseca & Giovanni Gallipoli & Yaniv Yedid-Levi, 2016. "Revisiting the Relationship Between Unemployment and Wages," Working Papers 2016-001, Human Capital and Economic Opportunity Working Group.
    6. Artuç, Erhan & McLaren, John, 2015. "Trade policy and wage inequality: A structural analysis with occupational and sectoral mobility," Journal of International Economics, Elsevier, vol. 97(2), pages 278-294.
    7. Kondo, Ayako & Naganuma, Saori, 2015. "Inter-industry labor reallocation and task distance," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 127-147.
    8. Bauer, Anja, 2015. "Reallocation patterns across occupations," IAB Discussion Paper 201526, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    Occupational Mobility; Tasks; Worker Flows; Mobility Costs; Gravity Model;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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