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The Two Faces of Worker Specialization

Author

Listed:
  • Barany, Zsofia
  • Holzheu, Kerstin

Abstract

In this paper, we study whether skills can be both an asset and a liability. We show that the accumulation of specialized skills not only increases the return to a specific activity but it also increases the exposure to labor market risks. Specialized workers, once displaced, might take longer to find a job, as their specialized skills might make them less productive across jobs on average. Yet, once they find a suitable job, that job is likely to be better matched to their skills, increasing job stability and entry wages. We empirically verify this hypothesis using displacement events in French and US data and find evidence for these links.

Suggested Citation

  • Barany, Zsofia & Holzheu, Kerstin, 2023. "The Two Faces of Worker Specialization," CEPR Discussion Papers 18320, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18320
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    More about this item

    Keywords

    Specialization; Skills; Displacement;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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