[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/863.html
   My bibliography  Save this paper

Empirical Evidence on Occupation and Industry Specific Human Capital

Author

Listed:
  • Sullivan, Paul
Abstract
This paper presents instrumental variables estimates of the effects of firm tenure, occupation specific work experience, industry specific work experience, and general work experience on wages using data from the 1979 Cohort of the National Longitudinal Survey of Youth. A key feature of the empirical work presented in this paper is that the returns to human capital are allowed to vary across occupations, in contrast to existing research which has constrained the parameters of the wage equation to be the same across occupations. The estimates indicate that both occupation and industry specific human capital are key determinants of wages, and the importance of various types of human capital varies widely across one-digit occupations. Human capital is primarily occupation specific in occupations such as craftsmen, where workers realize a 14% increase in wages after five years of occupation specific experience but do not realize wage gains from industry specific experience. In contrast, human capital is primarily industry specific in other occupations such as managerial employment where workers realize a 23% wage increase after five years of industry specific work experience. In other occupations, such as professional employment, both occupation and industry specific human capital are key determinants of wages.

Suggested Citation

  • Sullivan, Paul, 2006. "Empirical Evidence on Occupation and Industry Specific Human Capital," MPRA Paper 863, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:863
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/863/1/MPRA_paper_863.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/9312/1/MPRA_paper_9312.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    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.
    2. 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.
    3. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    4. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 17(Nov), pages 2-20.
    5. Christian Dustmann & Costas Meghir, 2005. "Wages, Experience and Seniority," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 77-108.
    6. William J. Carrington, 1993. "Wage Losses for Displaced Workers: Is It Really the Firm That Matters?," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 435-462.
    7. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    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. Jeff Biddle & Karen Roberts, 1994. "Private Sector Scientists and Engineers and the Transition to Management," Journal of Human Resources, University of Wisconsin Press, vol. 29(1), pages 82-107.
    10. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-192, February.
    11. McCall, Brian P, 1990. "Occupational Matching: A Test of Sorts," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 45-69, February.
    12. Bernt Bratsberg & Dek Terrell, 1998. "Experience, Tenure, and Wage Growth of Young Black and White Men," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 658-682.
    13. 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.
    14. 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.
    15. Lalith Munasinghe & Brendan O'Flaherty, 2005. "Specific Training Sometimes Cuts Wages and Always Cuts Turnover," Journal of Labor Economics, University of Chicago Press, vol. 23(2), pages 213-234, April.
    16. Joseph G. Altonji & Nicolas Williams, 2005. "Do Wages Rise with Job Seniority? A Reassessment," ILR Review, Cornell University, ILR School, vol. 58(3), pages 370-397, April.
    17. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-324, March.
    18. Lee A. Lillard, 1999. "Job Turnover Heterogeneity and Person-Job-Specific Time-Series Wages," Annals of Economics and Statistics, GENES, issue 55-56, pages 183-210.
    19. Audrey Light & Kathleen McGarry, 1998. "Job Change Patterns And The Wages Of Young Men," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 276-286, May.
    20. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    21. 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.
    22. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    23. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Mobility and Wage Inequality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(2), pages 731-759.
    24. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
    25. Alexandros Zangelidis, 2008. "Occupational And Industry Specificity Of Human Capital In The British Labour Market," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(4), pages 420-443, September.
    26. Paul Sullivan, 2009. "Estimation of an Occupational Choice Model when Occupations are Misclassified," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    27. Uta Schönberg, 2007. "Wage Growth Due to Human Capital Accumulation and Job Search: A Comparison between the United States and Germany," ILR Review, Cornell University, ILR School, vol. 60(4), pages 562-586, July.
    28. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843, Elsevier.
    29. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-677, October.
    30. John M. Abowd & Francis Kramarz & Sébastien Roux, 2006. "Wages, Mobility and Firm Performance: Advantages and Insights from Using Matched Worker-Firm Data," Economic Journal, Royal Economic Society, vol. 116(512), pages 245-285, June.
    31. Eric D. Gould, 2002. "Rising Wage Inequality, Comparative Advantage, and the Growing Importance of General Skills in the United States," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 105-147, January.
    32. Mellow, Wesley & Sider, Hal, 1983. "Accuracy of Response in Labor Market Surveys: Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 331-344, October.
    33. Dostie, Benoit, 2005. "Job Turnover and the Returns to Seniority," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 192-199, April.
    34. Kathryn L. Shaw, 1985. "Occupational change, employer change, and the transferability of skills," Working Paper Series / Economic Activity Section 55, Board of Governors of the Federal Reserve System (U.S.).
    35. Parent, Daniel, 2000. "Industry-Specific Capital and the Wage Profile: Evidence from the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 306-323, April.
    36. repec:adr:anecst:y:1999:i:55-56:p:07 is not listed on IDEAS
    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. Gathmann, Christina & Schönberg, Uta, 2006. "How General Is Specific Human Capital?," IZA Discussion Papers 2485, Institute of Labor Economics (IZA).
    2. 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.
    3. Christina Gathmann & Uta Schönberg, 2010. "How General Is Human Capital? A Task-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 1-49, January.
    4. Joseph G. Altonji & Anthony A. Smith Jr. & Ivan Vidangos, 2013. "Modeling Earnings Dynamics," Econometrica, Econometric Society, vol. 81(4), pages 1395-1454, July.
    5. 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.
    6. Ken Ueda, 2019. "How Do Local Labor Markets and Human Capital Affect Employment Outcomes after Job Loss?," Southern Economic Journal, John Wiley & Sons, vol. 86(2), pages 548-572, October.
    7. 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.
    8. Arellano-Bover, Jaime & Saltiel, Fernando, 2021. "Differences in On-the-Job Learning across Firms," IZA Discussion Papers 14473, Institute of Labor Economics (IZA).
    9. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    10. Kritkorn Nawakitphaitoon, 2014. "Occupational Human Capital and Wages: The Role of Skills Transferability Across Occupations," Journal of Labor Research, Springer, vol. 35(1), pages 63-87, March.
    11. Michele Battisti, 2016. "Individual Wage Growth: The Role of Industry Experience," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(1), pages 40-70, January.
    12. Eric Parrado & Asena Caner & Edward N. Wolff, 2005. "Occupational and Industrial Mobility in the United States 1969–93," Economics Working Paper Archive wp_416, Levy Economics Institute.
    13. Moshe Buchinsky & Denis Fougère & Francis Kramarz & Rusty Tchernis, 2002. "Interfirm Mobility, Wages and the Returns to Seniority and Experience in the U.S," Working Papers 2002-29, Center for Research in Economics and Statistics.
    14. Yamamura, Eiji & Ohtake, Fumio, 2021. "Firm-specific human capital in different market conditions: Evidence from the Japanese football league," Japan and the World Economy, Elsevier, vol. 58(C).
    15. I. Sebastian Buhai & Coen N. Teulings, 2014. "Tenure Profiles and Efficient Separation in a Stochastic Productivity Model," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 32(2), pages 245-258, April.
    16. Kwon, Illoong & Meyersson Milgrom, Eva M., 2014. "The significance of firm and occupation specific human capital for hiring and promotions," Labour Economics, Elsevier, vol. 31(C), pages 162-173.
    17. Parrado, Eric & Caner, Asena & Wolff, Edward N., 2007. "Occupational and industrial mobility in the United States," Labour Economics, Elsevier, vol. 14(3), pages 435-455, June.
    18. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    19. Philip Jung & Moritz Kuhn, 2019. "Earnings Losses and Labor Mobility Over the Life Cycle," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 678-724.
    20. Parent, Daniel, 2002. "Matching, human capital, and the covariance structure of earnings," Labour Economics, Elsevier, vol. 9(3), pages 375-404, July.
    21. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 436-460, August.

    More about this item

    Keywords

    occupation specific human capital; industry specific human capital; specificity of human capital; wage growth;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:863. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.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.