How Hard is It to Get Another Job? Occupational Employment Risk and Its Consequences for Unemployment Duration and Wages

Ignez M Tristao, University of Maryland

There are substantial differences in unemployment durations and reemployment outcomes across workers from different occupations. In this paper, I argue that this variation can be explained in part by differences in occupational employment risk, which arises from two sources: (1) the diversification of occupational employment across industries; and (2) the volatility of industry employment fluctuations, including sectoral comovements. I define and implement a measure of occupational employment risk. Using the NLSY79 male sample, I construct a weekly panel of employment and demographic histories for the period 1979-2000. I then relate the occupational employment risk measure to occupational unemployment durations and wage losses. Applying a competing risk duration model, I find that unemployed workers in high employment risk occupations have 5% lower hazard ratios of leaving unemployment to a job in the same occupation and have 4.9% higher wage losses upon reemployment than workers in low employment risk occupations.