A Task-based Approach to Constructing Occupational Categories with Implications for Empirical Research in Labor Economics

Julia Manzella, Evan Totty and Gary Benedetto

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Most applied research in labor economics that examines returns to worker skills or differences in earnings across subgroups of workers typically accounts for the role of occupations by controlling for occupational categories. Researchers often aggregate detailed occupations into categories based on the Standard Occupation Classification (SOC) coding scheme, which is based largely on narratives or qualitative measures of workers’ tasks. Alternatively, we propose two quantitative task-based approaches to constructing occupational categories by using factor analysis with O*NET job descriptors that provide a rich set of continuous measures of job tasks across all occupations. We find that our task-based approach outperforms the SOC-based approach in terms of lower occupation distance measures. We show that our task-based approach provides an intuitive, nuanced interpretation for grouping occupations and permits quantitative assessments of similarities in task compositions across occupations. We also replicate a recent analysis and find that our task-based occupational categories explain more of the gender wage gap than the SOC-based approaches explain. Our study enhances the Federal Statistical System’s understanding of the SOC codes, investigates ways to use third-party data to construct useful research variables that can potentially be added to Census Bureau data products to improve their quality and versatility, and sheds light on how the use of alternative occupational categories in economics research may lead to different empirical results and deeper understanding in the analysis of labor market outcomes.

Pages: 59 pages
Date: 2019-09
New Economics Papers: this item is included in nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www2.census.gov/ces/wp/2019/CES-WP-19-27.pdf First version, 2019 (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:cen:wpaper:19-27

Access Statistics for this paper

More papers in Working Papers from U.S. Census Bureau, Center for Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Dawn Anderson ().