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Title: Costs of Skill Reallocation Across Occupational Task Measures

Citation Type: Miscellaneous

Publication Year: 2016

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Abstract: Combining the existing occupational mobility and task literature, this paper develops a unique tech- nique for estimating how likely workers are to reallocate their skills across occupations. Existing literature on occupational mobility studies how the variation in worker human capital determines workers’ propensity to reallocate their stock of skills to another occupation. This paper builds upon this literature by using variation in specific occupational task characteristics to estimate hetero- geneity in the costs associated with skill allocation through workers’ preferences to perform tasks. Specifically, I frame the problem in a discrete choice framework where occupational choice in period t + 1, is conditional on the task distance between a worker’s occupation in period t and all potential alternative occupations in t + 1. The focus of this paper is to show that distance in tasks between the current occupation and potential alternative occupation is an important determinant of occupa- tional choice. Controlling for occupational pairwise wage differences has little impact on the effect task distances have on occupational choice. The implication of the results is that heterogeneous costs associated with task specific skill reallocation is a major mechanism in determining workers’ occupational choice. Costs are greatest in low-skilled task distances and lowest in middle-skilled cognitive task distances. The findings in this paper suggest that workers are choosing occupations that are less task intensive than the previous occupation. Additionally, there is heterogeneity in costs of skill reallocation across task distances between female and male workers, younger and older workers, and by educational attainment.

Url: https://www.sole-jole.org/17601.pdf

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Authors: Gibbons, Eric

Publisher: University of Nevada, Reno

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure

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