TY - JOUR
T1 - Specialists or generalists? Cross-industry mobility and wages
AU - Hervé, Justine
N1 - Publisher Copyright:
© 2023 Elsevier B.V.
PY - 2023/10
Y1 - 2023/10
N2 - This paper quantifies the association between industrial specialization at the occupation level and job mobility and earnings for low and middle-wage American workers. I propose the concept of industry specificity to capture the degree of industrial specialization of a worker's occupation. I measure industry specificity using an index of industrial concentration of employment (CEI) defined at the occupation-state-year level. Linking this index to individual-level panel data on wages and job transitions, I show that CEI is negatively associated with workers' wages: moving from the first quartile to the third quartile of industry specificity decreases wages by 13 percent. I next examine the mechanisms that explain these findings. I first find that CEI is negatively associated with cross-industry and cross-occupation mobility, that is, workers employed in industry-specific occupations change industry and occupation less frequently than workers in less specific occupations. In addition, I show that occupation-level factors such as skill uniqueness and automatability increase industry specificity; but they cannot entirely explain the negative effect of CEI on wages. Finally, in line with the main results, I provide suggestive evidence that workers in industry-specific occupations are more vulnerable to industry-wide wage shocks compared to their generalist counterparts.
AB - This paper quantifies the association between industrial specialization at the occupation level and job mobility and earnings for low and middle-wage American workers. I propose the concept of industry specificity to capture the degree of industrial specialization of a worker's occupation. I measure industry specificity using an index of industrial concentration of employment (CEI) defined at the occupation-state-year level. Linking this index to individual-level panel data on wages and job transitions, I show that CEI is negatively associated with workers' wages: moving from the first quartile to the third quartile of industry specificity decreases wages by 13 percent. I next examine the mechanisms that explain these findings. I first find that CEI is negatively associated with cross-industry and cross-occupation mobility, that is, workers employed in industry-specific occupations change industry and occupation less frequently than workers in less specific occupations. In addition, I show that occupation-level factors such as skill uniqueness and automatability increase industry specificity; but they cannot entirely explain the negative effect of CEI on wages. Finally, in line with the main results, I provide suggestive evidence that workers in industry-specific occupations are more vulnerable to industry-wide wage shocks compared to their generalist counterparts.
KW - Cross-Industry Job Mobility
KW - Industry Specificity
KW - Labor Market Frictions
KW - Mobility Costs
KW - Wages
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U2 - 10.1016/j.labeco.2023.102391
DO - 10.1016/j.labeco.2023.102391
M3 - Article
AN - SCOPUS:85169326633
SN - 0927-5371
VL - 84
JO - Labour Economics
JF - Labour Economics
M1 - 102391
ER -