Human Capital Specificity: Evidence from the Dictionary of Occupational Titles and Displaced Worker Surveys, 1984–2000

Abstract

This paper uses information from the Dictionary of Occupational Titles (DOT) and Displaced Worker Surveys (DWS) to provide evidence on the source of human capital specificity. Measures of four basic skills are constructed from the detailed DOT information. These measures are used to characterize the skill portfolio of each job and to construct distance measures between jobs.The pattern of wage losses from the DWS shows that large losses are more closely associated with switching skill portfolios than switching industry or occupation code per se and that these switches represent large decreases in the underlying skill portfolio in the post-displacement job. The recent evidence for industry specific capital is re-examined. An analysis using the same methods as Neal (1995) that incorporates the skill portfolio measures provides further evidence in favor of broad skill based specificity.2

Inter-industry labor flows

“…The fact that inter-industry flow patterns are similar for different occupations suggests that human capital has an industry-specific component that is quite independent of a worker's occupation. This contrasts with the findings of Kambourov and Manovskii (2009) Kambourov and Manovskii (2009) and Poletaev and Robinson (2008) that industry specificity is scarcely important after taking occupational specificity into account. Tables 5 and 6 together, we arrive at the following stylized fact:…”

“…Moreover, today's workforces are highly specialized: individual workers often invest heavily in education and training to acquire specific skills that allow them to carry out tasks that range from engineering or financial management to construction work or food preparation. Because workers specialize, their human capital is often held to be specific to the firm where they work (Becker, 1964), to an industry (Neal, 1995;Parent, 2000;Sullivan, 2010) and to the tasks performed (Poletaev and Robinson, 2008;Gathmann and Schoenberg, 2010). However, there is considerable debate about which of these dimensions of skill specificity dominate.…”

“…For instance, relatedness matrices such as the skill-relatedness matrix in this paper have various practical and academic applications, ranging from employment and retraining programs to research in labor economics (Poletaev and Robinson, 2008;Gathmann and Schön-berg, 2010), economic geography (Porter, 2003;Neffke et al, 2011;Boschma et al, 2013), development economics (Hidalgo et al, 2007) and strategic management (e.g., Teece et al, 1994;Farjoun, 1994;Bryce and Winter, 2009;Lien and Klein, 2009). Moreover, our results suggest that analyzing inter-industry flows may offer new ways to study labor markets and the flexibility of a labor force.…”

Collecting information on job tasks—an instrument to measure tasks required at the workplace in a multi-topic survey

“…First, tasks may be identified with the help of expert judgments. This approach is used in the Dictionary of Occupational Titles (DOT), which is often employed to capture tasks in empirical analyses (Yamaguchi 2012;Poletaev and Robinson 2008;Autor et al 2003). The downside of this approach is that the DOT only includes occupation level information.…”

Industry- and occupation-specific skills of displaced workers

“…Furthermore, the studies overlook the choices workers have to make after displacement. For displaced workers, the loss in wage is more associated to the change in the portfolio of skills required to perform tasks than to the change of industry or occupation codes, as suggested by Poletaev and Robinson (2008). It is necessary to determine whether the wages of displaced workers are affected by their choice to stay in the same industry/occupation or to change industry/occupation.…”