Skill Formation and Utilization in the Labor Market

This paper attempts to understand occupational mobility and wage growth of young workers in terms of basic labor market skills; cognitive, interpersonal, and motor skills. I emphasize that occupations are heterogeneous in formation and utilization of these skills. The model is structurally estimated using occupational task measures from the Dictionary of Occupational Titles and career history from the NLSY79. I find that observed occupational choice is largely rationalized by skills, not by preference. The results also indicate that wage growth of high school graduates are driven by the growth of motor skills at the very early career. However, interpersonal skills take over the position as the main contributor to the wage growth subsequently.