Skills, tasks and mismatch: three essays in empirical microeconomics

This PhD dissertation examines the role of job tasks as a means to explaining wage inequality in the labour market. In the first chapter I study whether we can improve our understanding of labour market mismatch and its consequences for wages by augmenting current measures of mismatch with task information. In the second chapter, I look at whether task-and-skill augmented mismatch is substantially different for men and women. In the third chapter, I study whether individuals’ job tasks and their level of difficulty change when they make transitions in the labour market and the extent to which these changes are affected by recessions. Chapter 1. Job Tasks and Mismatch within Occupations I propose a new multi-dimensional measure of mismatch derived from individual-level information on skills and tasks. Previous measures have either entirely excluded information about tasks or have used tasks aggregated at the level of the occupation, rather than at the individual level. I find that across nine European countries, up to 24% of the population is mismatched in literacy and 15% in numeracy. I also find that for Northern European countries, extreme levels of skill-task mismatch are negatively correlated with wages and the correlation persists within occupations. Southern and Central Europe do not appear to exhibit any correlation between mismatch and wages, either between or within occupations. Subsequently, I compare the new measure to existing measures of mismatch from the literature. I find that measures based on higher levels of data aggregation or measures excluding the role of tasks tend to consistently under-estimate the cross-sectional correlation between mismatch and wages. Chapter 2. Gender and Mutli-dimensional Mismatch Using a measure of multi-dimensional mismatch developed in chapter 1, I compare mismatch in literacy and numeracy among men and women in the labour market in a sample of 9 European countries. Previous studies on multi-dimensional mismatch have used male-only samples due to a lack of individual-level data about female skills and tasks. I discuss a set of stylised facts about literacy and numeracy mismatch for men and women: men and women have similar levels of mismatch in literacy but not in numeracy, with women experiencing less negative mismatch. In terms of outcomes, men and women are affected by mismatch in similar ways: in most countries their earnings are negatively affected by being under-skilled in either literacy or numeracy. Women appear to show a slightly greater advantage than men at being over-skilled in numeracy. Finally, I find that mismatch does not help explain part of the gender earnings gap in a traditional Mincer model. Chapter 3. The Task Content of Occupational Transitions over the Business Cycle: Evidence for the UK We study the change in the task content and the extent of up- and de-skilling of occupational transitions over the business cycle for the UK. Previous literature shows that during recessions individuals are less likely to move occupations - yet it is unclear whether their task portfolio and the skill level of tasks also changes during the cycle. We use quarterly data from the U.K. Labour Force Survey, which we match to the O*NET dictionary of tasks for the period 1997q1 - 2016q2. We find that during recessions, individuals tend to move to more similar occupations in terms of tasks and they are also less likely to experience an increase in the skill requirements of their new jobs