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Occupational Human Capital and Wages: The Role of Skills Transferability Across Occupations

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  • Kritkorn Nawakitphaitoon

Abstract

This paper examines the effect of accumulated human capital, and particularly occupational human capital, on the workers’ wages. Unlike previous studies that apply occupational tenure as a proxy for occupational human capital, this paper applies the concept of Shaw’s ( 1984 ) occupational human capital to capture the transferability of occupational skills and estimates a new measure of occupational human capital, so-called occupational investment. Using the National Longitudinal Survey of Youth (NLSY) from 1979 to 2000, the key findings of this paper suggest that occupational skills from the previous jobs can also affect the workers’ wages at the current job and that occupational investment is one of the important sources of wages supporting the Shaw’s original work on wage determination. Specifically, 5 years of (3-digit) occupational investment relative to current occupational tenure could lead to a wage increase of 7.7 to 18.4 %. I also find that the general labor market experience accounts for a large share of workers’ wages. Copyright Springer Science+Business Media New York 2014

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  • Kritkorn Nawakitphaitoon, 2014. "Occupational Human Capital and Wages: The Role of Skills Transferability Across Occupations," Journal of Labor Research, Springer, vol. 35(1), pages 63-87, March.
    • Handle: RePEc:spr:jlabre:v:35:y:2014:i:1:p:63-87
    DOI: 10.1007/s12122-013-9172-2
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    References listed on IDEAS

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    1. Kathryn L. Shaw, 1984. "A Formulation of the Earnings Function Using the Concept of Occupational Investment," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 319-340.
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    Cited by:

    1. Kritkorn Nawakitphaitoon & Russell Ormiston, 2015. "Occupational human capital and earnings losses of displaced workers: does the degree of similarity between pre- and post-displacement occupations matter? [Berufliches Humankapital und Einkommensver," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(1), pages 57-73, March.
    2. Muhammad Azeem Qureshi & Fred H. Strønen & Marius Tyseng & Marius Urdal, 2020. "Sustainable Business in Norway: The Firm or the Industry Effect?," Sustainability, MDPI, vol. 12(8), pages 1-13, April.
    3. Eggenberger, Christian & Rinawi, Miriam & Backes-Gellner, Uschi, 2018. "Occupational specificity: A new measurement based on training curricula and its effect on labor market outcomes," Labour Economics, Elsevier, vol. 51(C), pages 97-107.
    4. Matthias Kräkel, 2016. "Human Capital Investment and Work Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(3), pages 627-651, September.
    5. Kritkorn Nawakitphaitoon & Russell Ormiston, 2016. "The estimation methods of occupational skills transferability [Die Methoden zur Einschätzung der Übertragbarkeit beruflicher Kompetenzen]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(4), pages 317-327, December.
    6. Hila Axelrad & Miki Malul & Israel Luski, 2018. "Unemployment among younger and older individuals: does conventional data about unemployment tell us the whole story?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-12, December.

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    More about this item

    Keywords

    Occupational human capital; Skills transferability; Wages; J31; J62; J63;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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