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Author: Holter, Hans Aasnes
Resulting in 1 citation.
1. Hernandez Martinez, Victor
Holter, Hans Aasnes
Pinheiro, Roberto
The Hedgehog's Curse: Knowledge Specialization and Displacement Loss
Working Paper 22-31, Federal Reserve Bank of Cleveland, November 2022.
Also: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4273012
Cohort(s): NLSY79, NLSY97
Publisher: Federal Reserve Bank of Cleveland
Keyword(s): Cross-national Analysis; Displaced Workers; Earnings; Human Capital; Norway, Norwegian

Permission to reprint the abstract has not been received from the publisher.

This paper studies the impact of knowledge specialization on earnings losses following displacement. We develop a novel measure of the specialization of human capital, based on how concentrated the knowledge used in an occupation is. Combining our measure with individual labor histories from the NLSY 79-97 and Norway's LEED, we show that workers with more specialized human capital suffer larger earnings losses following exogenous displacement. A one standard deviation increase in pre-displacement knowledge specialization increases the earnings losses post-displacement by 3 to 4 pp per year in the US, and by 1.5 to 2 pp per year in Norway. In the US, the negative effect of higher pre-displacement knowledge specialization on post-displacement earnings is driven by the negative impact of knowledge specialization on well-paid outside opportunities. By contrast, this association between outside opportunities and knowledge specialization plays no role in post-displacement earnings losses in Norway, where the negative effect of specialization is in part explained by its association with the routine content and the offshoring probability of the occupation.
Bibliography Citation
Hernandez Martinez, Victor, Hans Aasnes Holter and Roberto Pinheiro. "The Hedgehog's Curse: Knowledge Specialization and Displacement Loss." Working Paper 22-31, Federal Reserve Bank of Cleveland, November 2022.