Victor Hernandez Martinez , Hans A. Holter , Roberto Pinheiro
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The Hedgehog’s curse: Knowledge specialization and displacement loss
This paper studies the impact of knowledge specialization on earnings losses following displacement. We develop a novel measure of human capital specialization based on the share of knowledge areas that are irrelevant for an occupation. Combining our measure with individual labor histories from the NLSY, we show that workers with human capital specialization one standard deviation larger than average suffer earnings losses 4.8 percentage points larger than average per year following exogenous displacement. A longer average duration of non-employment spells and occupational downgrading are the two mechanisms that explain the negative effect of specialization on post-displacement earnings.
期刊介绍:
Labour Economics is devoted to publishing research in the field of labour economics both on the microeconomic and on the macroeconomic level, in a balanced mix of theory, empirical testing and policy applications. It gives due recognition to analysis and explanation of institutional arrangements of national labour markets and the impact of these institutions on labour market outcomes.