1 research outputs found
Deconstructing Human Capital to Construct Hierarchical Nestedness
Modern economies generate immensely diverse complex goods and services by
coordinating efforts and know-how of people in vast networks that span across
the globe. This increasing complexity puts us under the pressure of acquiring
an ever-increasing specialized and yet diverse skill portfolio in order to stay
effective members of a complex economy. Here, we analyze the skill portfolios
of workers in an effort to understand the latent structure and evolution of
these portfolios. Analyzing the U.S. survey data (2003-2019) and 20 million
resumes, we uncover a tree structure of vertical skill dependencies such that
skills that only a few jobs need (specialized) are located at the leaves under
the broadly demanded (general skills). The resulting structure exhibits an
unbalanced tree shape. The unbalanced shape allows the further categorization
of specialized skills: nested branching out of a deeply rooted sturdy trunk
reflecting a dense web of common prerequisites, and un-nested lacking such
support. Our longitudinal analyses show individuals indeed become more
specialized, going down the nested paths as moving up the career ladder to
enjoy higher wage premiums. The specialization, however, is most likely
accompanied by demands for a higher level of general skills, and furthermore,
specialization without the strengthening of general skills is deprived of wage
premiums. We examine the geographic and demographic distribution of skills to
explain disparities in wealth. Finally, historical changes in occupation skill
requirements show these branches have become more fragmented over the decade,
suggesting the increasing labor gap.Comment: 26 pages, 7 figure