Empirical Evidence on Occupation and Industry Specific Human Capital

Paul Sullivan

MPRA Paper from University Library of Munich, Germany

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.

Keywords: occupation specific human capital; industry specific human capital; specificity of human capital; wage growth (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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https://mpra.ub.uni-muenchen.de/863/1/MPRA_paper_863.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/9312/1/MPRA_paper_9312.pdf revised version (application/pdf)

Related works:
Journal Article: Empirical evidence on occupation and industry specific human capital (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:863

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