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A Directed Search Model of Occupational Mobility

    There has been considerable interest in the patterns of occupational mobility and their effect on various economic issues. In this paper, I utilize the unique interview structure of the longitudinal SIPP to uncover additional interesting facts on occupational mobility. I find that occupational behavior exhibits strong persistence not only among employed workers but also among non-employed workers; occupational switchers do not always switch to an occupation similar to their previous one; and the average length of transition duration workers spend before taking a new stable job varies with their previous occupation. Motivated by theses facts I build a directed search model of occupational mobility, which includes both aggregate and idiosyncratic shocks, and features occupational human capital as well as search frictions. The model can account for the bulk (around 70%) of the patterns in the data and can match reasonably well the emphasized facts. The model is used to study (i) the importance of idiosyncratic vs. aggregate shocks, and (ii) the barriers to occupational mobility. I find that idiosyncratic shocks are the main determinant of occupational mobility whereas aggregate shocks are unimportant. Further, fixed mobility costs and search frictions constitute significant barriers to mobility while the transfer loss of occupational human capital is only of modest importance quantitatively.

The U.S. Occupational Mobility from 1988 to 2003: 

Evidence from SIPP

   This paper uses SIPP, an underutilized data set to analyze the occupational mobility in the U.S. from 1988 to 2003. Exploiting SIPP's detailed information on workers' occupation, I propose and calculate various extended versions of occupational mobility rate to do robustness check, with careful treatment of the coding error. Unlike works that treat occupational mobility homogeneously, I classify all occupational switches into three categories: horizontal, vertical and special. Numerous mobility rates are computed according to different definitions, categories, time intervals, and subgroups. I find that, in terms of shares, horizontal switches dominate vertical and special ones at all times; that the mobility level and trend are generally consistent with other empirical works; and that aging decreases the occupational mobility while education's role ambiguous. Moreover, I examine the interaction between occupational mobility and labor market status, taking advantage of SIPP's high interview frequency and rich labor market information recording. I develop an algorithm to extract nonemployment information between jobs from SIPP. I find that most occupational switchers do not experience nonemployment between jobs, very similar to job changers without involving an occupational switch, but the duration variation is less in the former group than in the latter group. As time goes by, the employment-to-employment mobility fraction is declining for both groups.

General Occupational Tenure and Its Returns (with Chi Gong)

    We show that the task specificity of human capital is in line with the occupational specificity of human capital, by studying the returns to occupational human capital using a task-based approach, more specifically, under the assumptions that all occupations are uniquely distinct and that occupational human capital is partially transferable. We name the associated tenure variable ``General Occupational Tenure'' and propose an empirical Transfer Rate function that relates its transferable portion with the occupation distance. Combining SIPP data and task information from the DOT, we perform generalized wage regressions under 1-, 2-, and 3-digit occupational classifications and find that ``General Occupational Tenure'' is more important than other tenure variables. Moreover, three salient patterns are revealed: returns to the General Occupational Tenure demonstrate great variation across occupations; the fixed return generally dominates the variable return; and the two are always negatively correlated. Finally we generalize this result by showing that they actually apply to a large family of convexly decreasing Transfer Rate functions: as the discounting becomes heavier these functions converge to the limiting case where the three patterns hold.