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What Occupations Do

Author

Listed:
  • William Arbour
  • David J. Price

Abstract

Occupations are often seen as key labor market determinants, but little is known about their effect on workers. Using worker-occupation fixed effects, we first find that occupations explain only 3% of wage variance in the United States--too little to explain much of inequality, gender wage gaps, or other issues. Second, by introducing a new natural measure of occupational distance, we find that some occupations are consistently pluripotent, propelling workers to diverse jobs and allowing them to quickly overcome job loss. Third, we compile our estimates to provide new guidance for job seekers to help them choose better-informed career paths.

Suggested Citation

  • William Arbour & David J. Price, 2025. "What Occupations Do," Working Papers tecipa-800, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-800
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    More about this item

    Keywords

    Occupations; Variance decomposition; Earnings growth;
    All these keywords.

    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
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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