The worker's knowledge and skills are essential to their success in the labor market. Occupations demand different skills from workers; thus, to better use their already acquired knowledge, workers tend to move between occupations with similar skills requirements. The more skills a worker has that can be used in other occupations of higher socioeconomic status, the greater their chances of occupational socioeconomic mobility.
The following figure 1 shows the occupational similarity network of Brazil in which two occupations are connected if they require similar skills (Cardoso et al., 2022). The occupations are classified according to the International Standard Classification of Occupations 2008 (ISCO-08), and the skills are mapped according to the European Skills, Competences, Qualifications and Occupations (ESCO). The color intensity of the nodes (occupation) indicates their socioeconomic status according to the International Socioeconomic Index (ISEI). ISEI associates a numerical value (between 10 and 90) of the socioeconomic status to each ISCO-08 occupation (Ganzeboom, 2010). Judges have the highest ISEI (88.96) value and Hunters and Trappers have the lowest one (11.01).
The skills of workers, however, do not say everything about their future career possibilities. The worker's knowledge will only contribute to social mobility within her/his home region if it can be used in the next job. The possibilities of social mobility do not depend only on the knowledge of a worker, but also on how this knowledge can be absorbed by firms in the region where she lives. Thus, educational policies may need to be complemented by industrial policies that create the jobs necessary to absorb the skills of workers — whether previously or recently acquired — and that open up new paths for occupational and social mobility.
Let us consider the micro-region of Florianopolis as an example. For each occupation, between 2003 and 2019, we measured the likelihood of workers moving to an occupation with a higher socioeconomic status on an annual basis. In addition, we measured the average skill – similarity that each occupation has with other occupations in the region with higher socioeconomic status. The relationship between these two variables can be seen in Figure 2. The greater the local possibilities of using the skills in better occupations, the greater the chances of occupational socioeconomic mobility.
So, it is not just the skills of the workers that matter. It also matters how these skills can be locally used in other occupations with a higher socioeconomic status. An important policy implication is that political focus on general education and skill acquisition may not be sufficient for social mobility. The local labor markets and thus network of local occupational opportunities need to be explicitly considered, as it defines whether workers can use their occupation – specific knowledge to move into occupations with a higher income and socioeconomic status.
Within this line of research, Necode researchers show that new methods of network science and complexity research can help to depict the interactions between individual skills and the network structure of local labor markets.
Ben-Hur Cardoso and Dominik Hartmann
References:
Cardoso et al. (2022) How skill-specific local labor markets shape employment persistence, socioeconomic mobility, and wage prospects. Working Paper
Gathmann, C., & Schönberg, U. (2010). How general is human capital? A task-based approach. Journal of Labor Economics, 28(1), 1-49.
Ganzeboom, H. B. (2010). A new International Socio-Economic Index (ISEI) of occupational status for the International Standard Classification of Occupation 2008 (ISCO-08) constructed with data from the ISSP 2002–2007. In annual conference of international social survey programme, Lisbon (Vol. 1). occupational / social mobility.