Occupational Choice, Human Capital and Learning: A Multi-Armed Bandit Approach

Rafael de Melo () and Theodore Papageorgiou
Additional contact information
Rafael de Melo: University of Edinburgh

No 1076, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper introduces a model of worker matching at the occupation level. In our setup, young workers, while employed in an occupation, accumulate human capital and also learn about their underlying productivity in that occupation. Human capital is partially transferable to other occupations and similarly, the information acquired in one occupation is useful for the worker’s productivity elsewhere. Workers with low tenure levels, as well as low-paid workers, are the ones most likely to switch occupations, consistent with our empirical findings. Though the model is quite general, we show that Gittins indices can be used in this setup to preserve tractability. We discuss potential applications ranging from assessing the impact of AI and automation to the evaluation of policies such as unemployment benefits, sector-specific subsidies, or minimum wages.

Keywords: Human Capital; Occupations; Multi-armed Bandits; Worker Mobility; Learning; Information and Human Capital Spillovers; Wage Inequality; Gittins Index. (search for similar items in EconPapers)
JEL-codes: J24 J31 J62 (search for similar items in EconPapers)
Date: 2024-06-10
New Economics Papers: this item is included in nep-lma and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://fmwww.bc.edu/EC-P/wp1076.pdf main text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:1076

Access Statistics for this paper

More papers in Boston College Working Papers in Economics from Boston College Department of Economics Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F Baum ().