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Does High School Employment Develop Marketable Skills?

Abstract

While decades of academic research have consistently demonstrated a positive relationship between high school employment and adult earnings, the literature is empirically silent in regards to why this association exists. This study uses data from the National Longitudinal Survey of Youth 1997 (NLSY97) to examine the hypothesis that high school employment develops “marketable skills” in the form of occupation-specific human capital. By analyzing wage variation attributable to the commonality of skill portfolios across respondents’ high school and adult (age 20 and 23) occupations, this study fails to find consistent evidence that the types of skills utilized in high school employment are correlated with adult earnings. Within the framework of the human capital model, this would suggest that the positive, post-school economic gains of in-school work are largely attributable to increases in general human capital (e.g., workplace socialization, character building).

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Notes

  1. Shaw (1984) defines an “occupation” as “a homogeneous skill classification within which individuals are perfect substitutes in demand and/or have infinite cross elasticities of substitution in supply. Cabinet-makers and engineers, for example, have occupation-specific skills,” (p. 320).

  2. Most occupational categories are based upon the first two digits of the relevant SOC codes. However, given the lack of observations in the “white-collar” occupational categories, these have all been collapsed into a singular “Professional and Management” classification for use in this study.

  3. This study favors this categorical approach over the use of specific occupation codes given that the latter method would ignore common promotions within a career track that typically accompany the move from student to adult employment.

  4. KSA “points” are defined as the product of O*NET’s importance and level score for each occupation in each of the 33 knowledge, 35 skill, and 52 ability categories. Pairwise occupational point comparisons are conducted in each category, with the minimum score representing the amount of each KSA that can be applied across both occupations. These “shared” point totals are then summed to produce overall knowledge, skill, and ability totals, which are then divided by the respective KSA totals of the in-school occupations. The resulting three ratios are then averaged to produce a one-number estimate of OSHC transferability. A full review of the methodology of this system can be found in Ormiston (2014).

  5. In regards to the incongruence between the 900 O*NET occupations the 508 utilized by the NSLY97, occupations are mapped one-to-one when available. Where more than one O*NET occupation is assigned to a relevant NSLY97 occupation, mean values of the O*NET scores are used. While imperfect, this approach was similarly employed by Hirsch (2005).

  6. OSHC transferability rates equal to one typically represent those who maintained the same occupation from one period to the next.

  7. NLSY97-calculated wage rates factor in the “reported pay, rate of pay time unit, and hours worked” and can “produce extremely low or extremely high pay rates.” While the elimination of those with wage rates below $2.00 and above $200.00 h may help, it is acknowledged that wage estimates may feature some uncertain amount of measurement error.

  8. This also excludes those who acquire a GED degree.

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Correspondence to Russell Ormiston.

Appendix

Appendix

Table 5 Regression analysis of high school employment on logged adult real hourly wage at Age 20 and 23

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Ormiston, R. Does High School Employment Develop Marketable Skills?. J Labor Res 37, 53–68 (2016). https://doi.org/10.1007/s12122-015-9219-7

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Keywords

  • Occupation
  • Human capital
  • Skill development
  • School employment