EconPapers    
Economics at your fingertips  
 

Multidimensional Skill Mismatch

Fatih Guvenen (), Burhanettin Kuruscu (), Satoshi Tanaka and David Wiczer ()

No 21376, NBER Working Papers from National Bureau of Economic Research, Inc

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? To help answer questions like these, we propose an empirical measure of multidimensional skill mismatch, which is based on the discrepancy between the portfolio of skills required by an occupation and the portfolio of abilities possessed by a worker for learning those skills. This measure arises naturally in a dynamic model of occupational choice and human capital accumulation with multidimensional skills and Bayesian learning about one’s ability to learn skills. Not only does mismatch depress wage growth in the current occupation, it also leaves a scarring effect—by stunting skill acquisition—that reduces wages in future occupations. Mismatch also predicts different aspects of occupational switching behavior. We construct the empirical analog of our skill mismatch measure from readily available US panel data on individuals and occupations and find empirical support for these implications. The magnitudes of these effects are large: moving from the worst- to the best-matched decile can improve wages by 11% per year for the rest of one’s career.

JEL-codes: E24 J24 J31 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-lma and nep-mac
Note: ED EFG LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28) Track citations by RSS feed

Published as Faith Guvenen & Burhan Kuruscu & Satoshi Tanaka & David Wiczer, 2015. "Multidimensional Skill Mismatch," Federal Reserve Bank of St. Louis, Working Papers, vol 2015(022).
Published as Fatih Guvenen & Burhan Kuruscu & Satoshi Tanaka & David Wiczer, 2020. "Multidimensional Skill Mismatch," American Economic Journal: Macroeconomics, vol 12(1), pages 210-244.

Downloads: (external link)
http://www.nber.org/papers/w21376.pdf (application/pdf)

Related works:
Journal Article: Multidimensional Skill Mismatch (2020) Downloads
Working Paper: Multidimensional Skill Mismatch (2018) Downloads
Working Paper: Multidimensional Skill Mismatch (2015) Downloads
Working Paper: Multidimensional Skill Mismatch (2015) Downloads
Working Paper: Multidimensional Skill Mismatch (2015) Downloads
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:nbr:nberwo:21376

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w21376

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2022-01-17
Handle: RePEc:nbr:nberwo:21376