Working Paper: NBER ID: w5651
Authors: Boyan Jovanovic; Yaw Nyarko
Abstract: People at the top of an occupational ladder earn more partly because they have spent time on lower rungs, where they have learned something. But what precisely do they learn? There are two contrasting views: First, the Bandit model assumes that people are different, that experience reveals their characteristics, and that consequently an occupational switch can result. Second, in our Stepping Stone model, experience raises a worker's productivity on a given task and the acquired skill can in part be transferred to other occupations, and this prompts movement. Safe activities (where mistakes destroy less output) are a natural training ground.
Keywords: occupational mobility; human capital; labor market
JEL Codes: J24; J62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| experience in simpler tasks (C99) | productivity (O49) |
| productivity (O49) | occupational advancement (J62) |
| experience in simpler tasks (C99) | occupational advancement (J62) |
| transfer of skills (J24) | productivity (O49) |
| experience (Y60) | job transitions (J62) |
| occupational mobility (J62) | lifetime earnings (J17) |