Search Results

The second paper builds a discrete occupational choice model that generalizes the static self-selection model with learning-by-doing. The model emphasizes the interaction between two general skills during the on-the-job skill accumulation processes. Workers' motivation for exploiting this interaction in order to accelerate skill accumulation generates occupational mobility. My estimation results based on the NLSY79 indicate that the model can replicate the empirical patterns of occupational mobility, wage growth, and wage dispersion. Of particular note is the model's capability to replicate a novel finding that a majority of workers congregate into occupations requiring relatively balanced skills as they age. Furthermore, the counterfactual experiment results suggest that increasing the cross-occupational moving costs would significantly slow down skill accumulation and reduce lifetime earnings.