Occupational uniqueness affects wage growth through task changes
Occupational Uniqueness and Wage Growth
Computation and Language
Summary
Changes in the tasks people do in their jobs can affect how much they earn, but not all task changes are the same. The authors studied how unique or common the tasks of different jobs are and found that jobs becoming less unique tend to have slower wage growth. Adding tasks that many other jobs perform can lower wage growth, while adding completely new tasks can increase it. This shows that understanding which tasks are shared across jobs and which are unique helps explain changes in wages better than just counting tasks.
What this means in practice
- •For labor economists: Analyze wage trends by incorporating the distinctiveness of job tasks across occupations, improving predictions about how task changes influence wages.
- •For workforce planners: Design better job training and career development programs by understanding which task changes in occupations affect wage growth positively or negatively.
Authors
R. Vestrelli, A. Fronzetti Colladon
Abstract
Changes in occupational task content may have different economic implications depending on whether the tasks gained or lost are occupation-specific or already widespread across the economy. Existing measures of occupational task change largely abstract from this distinction, treating occupations as self-contained task bundles rather than accounting for how tasks are distributed across occupations. We develop a framework to measure a distinct dimension of occupational change, one that goes beyond task expertise or task content: task structure. Using this new framework that tracks tasks across occupations and over time, we separate changes in task quantity from changes in occupational uniqueness, defined as the distinctiveness of an occupation's task bundle relative to other occupations. Using a harmonized dataset of 196563 task statements from the Dictionary of Occupational Titles and O*NET spanning 1977-2018, we measure task diffusion, occupational uniqueness, and distinct dimensions of task addition and removal. Occupations that become less unique are also associated with lower wage growth, and the wage associations of task additions and removals depend on how widely the affected tasks are performed elsewhere. Adding highly diffused tasks is associated with lower wage growth, as is removing occupation-specific tasks. At the economy-wide dimension, however, the pattern differs: the addition of new tasks is positively associated with wage growth, whereas the removal of tasks is negatively associated with it. Taken together, these results show that similar changes in the number of tasks performed by an occupation can reflect economically distinct processes. Incorporating the cross-occupational distribution of tasks, therefore, provides a richer account of occupational change and its relationship to the wage structure.