Sticky Occupations and Their Long-Run Implications
Paper Session
Saturday, Jan. 3, 2026 8:00 AM - 10:00 AM (EST)
- Chair: William Kerr, Harvard University
Path Dependence in the Labor Market: The Long-run Effects of Early Career Occupational Experience
Abstract
We study the causal effect of early career occupational experiences on labor market outcomes. To do so, we pair over two decades of administrative tax data with internal personnel records from the largest employer of young adults in the United States: the US Army. Soldiers work in a diverse and varied set of military occupations, including non-combat roles like mechanics, legal services, financial specialists, cooks, dental hygienists, police officers, and network/computer specialists. Eligibility is determined by test score cutoffs which we leverage in a series of 37 regression discontinuity designs. We find that early career occupational experiences generate a substantial amount of path dependence, with point estimates that suggest a 19p.p. increase in the likelihood of being observed in an identical or closely related occupation as much as 20 years later. We also find highly heterogeneous, yet predictable, effects on long-run wages. Implied changes in occupational earnings premia explain over 60% of the causal variation in earnings, with slope estimates that suggest improvements in average occupational wage rates are tightly linked to actual causal effects on earnings. Changes in non-routine and routine task intensity also explain causal wage gains; however, educational attainment and union density do not. Taken together, our results highlight the importance of early career occupational experience as a key channel for promoting long run economic success among young adults who are not college bound.The Transformation of Self Employment
Abstract
Over the past half-century, while self-employment has consistently accounted for around one in ten of the United States workforce, its composition has changed. Since 1970, industries with high startup capital requirements have declined from 53% of self-employment to 23%. This same time period also witnessed declines in hometown local entrepreneurship and the probability of the self-employed being among top earners. Using 2016 data, we show that high startup capital requirements are linked with lower profitability at small scales. The transition away from high startup capital industries appears most closely linked to changes in small business production functions and less due to advantageous reallocation to other opportunities, growth in returns-to-scale among large businesses, or a worsening of financing conditions and debt levels.Trapped in Declining Occupations: Barriers to Worker Mobility in a Changing Economy
Abstract
The U.S. has seen large changes in jobs, occupations, and mobility over the last two decades. We draw on large-scale administrative data from the U.S. Occupational Outlook Handbook (2000–2020) to investigate how immediate and projected occupational restructuring affects workers’ occupational mobility. Our results show that workers in both growing and declining occupations experience higher mobility than those in stable occupations. However, the direction of movement differs. Workers in declining occupations tend to move laterally to other declining positions and often experience downward mobility. Conversely, workers in growing occupations have a wider range of mobility options, with many achieving upward mobility through higher-paying transitions. These results underscore how recent shifts in the occupational structure exacerbate existing disadvantages for workers facing declining job opportunities.When is Mobility Possible? Escaping from Declining Occupations
Abstract
We compare the labor market trajectories of men and women in occupations that are differently exposed to technological change, both at the broad occupational level and with respect the worker's specific employer. Workers in declining occupations experience hours and earnings consequences, with heterogeneity in how well they are able to move to better opportunities. We quantify these differences by worker and family traits (e.g., education levels, having children) and in terms of original employers and locations (e.g., isolated manufacturing facility vs. urban service sector). We conduct similar estimations using employer-employee data in Norway and the United States to contrast different labor market institutional environments for the same sectors, such as Norway's stronger emphasis on collective bargaining.JEL Classifications
- J2 - Demand and Supply of Labor
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights