Soojeong Jung

Job Market Paper

• Multidimensional Human Capital and Wage Dynamics: Importance of Cognitive, Manual, and Interpersonal Skills Link

Abstract: This paper studies how cognitive, manual, and interpersonal task-specific human capital shape the wage dynamics over the early career. The paper develops a model of multidimensional human capital accumulation and wage progression, where occupations differ in task intensities.  Task intensities are constructed based on the job descriptors of O*NET. Workers, with different initial skill levels, accumulate task-specific human capital from experience, which is transferable across occupations. Potential worker selection effects are addressed through a Markov model of occupation choice with unobserved worker types. The model is estimated using employment histories from the National Longitudinal Survey of Youth 1997. Decomposition exercises show that 63% of wage growth is explained by the accumulation of cognitive human capital, 25% by manual human capital, while only 9% comes from interpersonal human capital. The significantly smaller contribution of interpersonal skills is attributed to their slower rate of accumulation. Cross-sectional wage variation across workers is primarily explained by initial skills and occupation-level wage differences, with cognitive human capital accumulation accounting for the rest.