Labor market transitions after layoffs: the role of occupational skills
Miriam Rinawi and
No 103, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)
We study the role of occupational skills for labor market transitions after layoffs. Exploiting rich data on occupational skills, we develop empirical measures for skill specificity and skill distance to investigate how skills map into job mobility and wages. We find a strong relationship between the degree of occupational specificity and individuals' mobility patterns and wages after layoffs. Individuals in more specific occupations are less likely to find reemployment in a different occupation and suffer longer periods of unemployment. However, we also find that workers who find employment in more specific occupations receive a wage premium of about 11% for one standard deviation higher specificity. These results suggest a risk-return tradeoff to investments into more occupation specific human capital that comes with wage premia on the one hand, but a reduction of outside options on the other hand.
Keywords: Keywords: occupational mobility; layoffs; unemployment; human capital; skills; occupational training (search for similar items in EconPapers)
JEL-codes: J62 J63 J64 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hrm and nep-lab
Date: 2014-12, Revised 2018-07
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Persistent link: https://EconPapers.repec.org/RePEc:iso:educat:0103
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