Human Capital Specificity: Evidence from the Dictionary of Occupational Titles and Displaced Worker Surveys 1984-2000

This paper uses information from the Dictionary of Occupational Titles (DOT) and Displaced Worker Surveys (DWS) to provide evidence on the source of human capital specificity. Measures of four basic skills are constructed from the detailed DOT information. These measures are used to characterize the skill portfolio of each job and to construct distance measures between jobs. The pattern of wage losses from the DWS shows that large losses are more closely associated with switching skill portfolios than switching industry or occupation code per se and that these switches represent large decreases in the underlying skill portfolio in the post-displacement job. The recent evidence for industry specific capital is re-examined. An analysis using the same methods as Neal (1995) that incorporates the skill portfolio measures provides further evidence in favor of broad skill based specificity.