The Role of Sector‐Specific Skills in Post displacement Earnings

Abstract

This article examines how one form of transferable skills, those valued within an industry or sector, may influence reemployment and earnings following permanent job loss. The empirical analysis finds limited evidence of a sector‐specific component to the returns to job tenure. The importance of these skills varies across sectors, with the strongest evidence found for sectors with sustained labor demand and growing employment. There is stronger evidence, particularly in reemployment, for a broader form of sector specificity that is not related to tenure, such as job search skills and vocational training. There is also sectoral evidence that is consistent with the role of individual ability in the returns to tenure.

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