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Author: Wiczer, David Geoffrey
Resulting in 2 citations.
1. Guvenen, Fatih
Kuruscu, Burhanettin
Tanaka, Satoshi
Wiczer, David Geoffrey
Multidimensional Skill Mismatch
NBER Working Paper No. 21376, National Bureau of Economic Research, July 2015.
Cohort(s): NLSY79
Publisher: National Bureau of Economic Research (NBER)
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Earnings; Occupational Choice; Occupational Information Network (O*NET); Skills

What determines the earnings of a worker relative to his peers in the same occupation? What makes a worker fail in one occupation but succeed in another? More broadly, what are the factors that determine the productivity of a worker-occupation match? In this paper, we propose an empirical measure of skill mismatch for a worker-occupation match, which sheds light on these questions. This measure is based on the discrepancy between the portfolio of skills required by an occupation (for performing the tasks that produce output) and the portfolio of abilities possessed by a worker for learning those skills. This measure arises naturally in a dynamic model of occupational choice with multidimensional skills and Bayesian learning about one's ability to learn these skills. In this model, mismatch is central to the career outcomes of workers: it reduces the returns to occupational tenure, and it predicts occupational switching behavior. We construct our empirical analog by combining data from the Armed Services Vocational Aptitude Battery (ASVAB), O*NET, and National Longitudinal Survey of Youth 1979 (NLSY79). Our empirical results show that the effects of mismatch on wages are large and persistent: mismatch in occupations held early in life has a strong effect on wages in future occupations. Skill mismatch also significantly increases the probability of an occupational switch and predicts its direction in the skill space. These results provide fresh evidence on the importance of skill mismatch for the job search process.
Bibliography Citation
Guvenen, Fatih, Burhanettin Kuruscu, Satoshi Tanaka and David Geoffrey Wiczer. "Multidimensional Skill Mismatch." NBER Working Paper No. 21376, National Bureau of Economic Research, July 2015.
2. Wiczer, David Geoffrey
Essays in Macro and Labor Economics
Ph.D. Dissertation, University of Minnesota, 2013
Cohort(s): NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Occupational Information Network (O*NET); Occupations; Skills; Unemployment; Wage Growth

Permission to reprint the abstract has not been received from the publisher.

The first chapter studies the rate of long-term unemployment, which spiked during the Great Recession. To help explain this, I exploit the systematic and counter-cyclical differences in unemployment duration across occupations. This heterogeneity extends the tail of the unemployment duration distribution, which is necessary to account for the observed level of long-term unemployment and its increase since 2007. This chapter introduces a model in which unemployment duration and occupation are linked; it measures the effects of occupation-specific shocks and skills on unemployment duration. Here, a worker will be paid more for human capital in his old occupation but a bad shock may make those jobs scarce. Still, their human capital partly ``attaches'' them to their prior occupation, even when searching there implies a longer expected duration. Hence, unemployment duration rises and becomes more dispersed across occupations. Redistributive shocks and business cycles, as in the Great Recession, exacerbate this effect.

For quantitative discipline, the model matches data on the wage premium to occupational experience and the co-movement of occupations' productivity. The distribution of duration is then endogenous. For comparison's sake, if a standard model with homogeneous job seekers matches the job finding rate, then it also determines expected duration and understates it. That standard model implies just over half of the long-term unemployment in 1976-2007 and almost no rise in the recent recession. But, with heterogeneity by occupation, this chapter nearly matches long-term unemployment in the period 1976-2007 and 70% of its rise during the Great Recession.

The second chapter studies the link between wage growth and the match of a worker's occupation and skills. The notion here is that if human capital accumulation depends on match quality, poor matches can have long-lasting effects on lifetime earnings. I build a model that incorporates such a mechanism, in which human capital accumulation is affected by imperfect information about one's self. This informational friction leads to matches in which a worker accumulates human capital more slowly and has weaker earnings growth.

Bibliography Citation
Wiczer, David Geoffrey. Essays in Macro and Labor Economics. Ph.D. Dissertation, University of Minnesota, 2013.