Occupational Mobility, Occupation Distance, and Specific Human Capital

Abstract

Distance and direction measures are constructed and used to contrast occupational mobility following involuntary job displacement and total occupational mobility. Displacement involves specific capital loss. Some voluntary occupational mobility, for example, promotions, reflects augmented skills rather than specific human capital loss. Wage losses following displacement are strongly related to distance and direction. This is reflected in a downward shift in the skill portfolio. By contrast, the skill portfolio change in total occupational mobility shows a neutral or modest upward pattern, suggesting limited or no specific human capital loss from voluntary occupational mobility. The mean distance in occupational mobility following displacement declined significantly in the 1980s and 1990s suggesting the labor market was more efficiently reemploying workers following displacement, lowering displacement costs in that period.