It Skills, Occupation Specificity and Job Separations

This paper examines how workers' earnings change after involuntary job separations depending on the workers' acquired IT skills and the specificity of their occupational training. We expect that IT skills can have opposing effects depending on their type. They can reduce or amplify earnings losses of workers with specific occupational skill bundles. We use information on all skills that workers acquire during their occupational training and categorize them along two independent dimensions. On one hand, we categorize IT skills into (a) generic IT skills useful in any context (e.g., online research) and expert IT skills (e.g., specific programming languages). On the other hand, we look at all skills of an occupation and distinguish between skill bundles that are more specific or less specific compared to the skill bundles that are needed in the overall labor market. We find clearly opposing correlations for IT skills in specific occupations: generic IT skills are positively correlated with earnings after involuntary separations, expert IT are negatively correlated with earnings after involuntary separations for workers in specific occupations.