Multidimensional Skill Mismatch
Fatih Guvenen,
Burhan Kuruscu,
Satoshi Tanaka and
David Wiczer
Working Papers from University of Toronto, Department of Economics
Abstract:
What determines the earnings of a worker relative to his peers in the same occupation? What makes a worker fail in one occupation but succeed in another? More broadly, what are the factors that determine the productivity of a worker-occupation match? In this paper, we propose an empirical measure of skill mismatch for a worker-occupation match, which sheds light on these questions. This measure is based on the discrepancy between the portfolio of skills required by an occupation (for performing the tasks that produce output) and the portfolio of abilities possessed by a worker for learning those skills. This measure arises naturally in a dynamic model of occupational choice with multidimensional skills and Bayesian learning about one's ability to learn these skills. In this model, mismatch is central to the career outcomes of workers: it reduces the returns to occupational tenure, and it predicts occupational switching behaviour. We construct our empirical analog by combining data from the Armed Services Vocational Aptitude Battery (ASVAB), O*NET, and National Longitudinal Survey of Youth 1979 (NLSY79). Our empirical results show that the effects of mismatch on wages are large and persistent: mismatch in occupations held early in life has a strong effect on wages in future occupations. Skill mismatch also significantly increases the probability of an occupational switch and predicts its direction in the skill space. These results provide fresh evidence on the importance of skill mismatch for the job search process.
Keywords: Skill mismatch; match quality; Mincer regression; ASVAB; O*NET; occupational switching (search for similar items in EconPapers)
JEL-codes: E24 J24 J31 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2015-07-10
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)
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https://www.economics.utoronto.ca/public/workingPapers/tecipa-544.pdf Main Text (application/pdf)
Related works:
Journal Article: Multidimensional Skill Mismatch (2020) 
Working Paper: Multidimensional Skill Mismatch (2018) 
Working Paper: Multidimensional Skill Mismatch (2015) 
Working Paper: Multidimensional Skill Mismatch (2015) 
Working Paper: Multidimensional Skill Mismatch (2015) 
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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-544
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