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Occupational human capital and earnings losses of displaced workers: does the degree of similarity between pre- and post-displacement occupations matter?
[Berufliches Humankapital und Einkommensverluste von freigesetzten Arbeitskräften: Wie sehr kommt es darauf, dass sich die Beschäftigungsverhältnisse vor und nach dem Arbeitsplatzverlust ähneln?]

Author

Listed:
  • Kritkorn Nawakitphaitoon

    (Renmin University of China)

  • Russell Ormiston

    (Allegheny College)

Abstract

This paper examines the effect of accumulated human capital, and particularly occupational human capital, on the earnings losses of displaced workers. Unlike most of the previous studies of job displacement, this paper uses a continuous measure of occupational skills transferability to measure the similarity between the pre- and post-displacement occupations of reemployed displaced workers. Using the 2004, 2006, 2008, and 2010 Displaced Worker Survey (DWS), the main finding is that post-displacement earnings losses are highly correlated with the degree of similarity between pre- and post-displacement occupations. Displaced workers who find jobs in occupations similar to their previous jobs suffer smaller earnings losses than those who find less similar jobs. This relationship is non-linear in that higher skills transferability reduces the earnings losses at a decreasing rate as the transferability of occupational skills increases.

Suggested Citation

  • 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.
  • Handle: RePEc:spr:jlabrs:v:48:y:2015:i:1:d:10.1007_s12651-014-0169-y
    DOI: 10.1007/s12651-014-0169-y
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    References listed on IDEAS

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    1. 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.

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    More about this item

    Keywords

    Job displacement; Occupational human capital; Skills transferability; Earnings losses;
    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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