The value of specific skills under shock: High risks and high returns

IT skills, occupation specificity and job separations

“…5 In the first case the skill bundle is called general, in the second case it is called specific. 6 This basic model of the skill weights approach has already been shown to lead to powerful and empirically well supported hypotheses (Mure, 2007;Eggenberger et al, 2018Eggenberger et al, , 2022. For example, Eggenberger et al (2022) calculate a specificity measure based on the skill weights approach and show that specificity leads to a risk-return trade-off for workers in case of labor market shocks.…”

“…6 This basic model of the skill weights approach has already been shown to lead to powerful and empirically well supported hypotheses (Mure, 2007;Eggenberger et al, 2018Eggenberger et al, , 2022. For example, Eggenberger et al (2022) calculate a specificity measure based on the skill weights approach and show that specificity leads to a risk-return trade-off for workers in case of labor market shocks. In this paper, we introduce an important extension to the basic model that allows us to study the particular effects of IT skills, which may come in two different features.…”

"This Time it's Different" - Generative Artificial Intelligence and Occupational Choice

“…In an apprenticeship, apprentices learn general skills but, most importantly, occupation-specific skills. While some of these occupation-specific skills can be transferred to other occupations (Eggenberger, Janssen, & Backes-Gellner, 2022), there is a considerable risk that the significant time and financial investment of an apprenticeship may become partially worthless if some of the skills learned can be easily substituted by AI now or in the near future.…”

How Middle-Skilled Workers Adjust to Immigration: The Role of Occupational Skill Specificity

“…On the other hand, specific skills could become relatively more valuable after a shock because they are scarce in the labor market. In a recent study using German data, Eggenberger et al (2022) show that workers with specific occupational skills benefit more from a positive trade shock than workers with general occupational skills, an e↵ect that they attribute to an increased demand for workers with specific occupational skills. Ultimately, which one of the two e↵ects dominate is an empirical question.…”