Beware of the Average: Occupational Characteristics

Originally posted in Oct 2024 on LinkedIn.

We often talk about jobs in the labor market in terms of occupational characteristics. For example, low-wage jobs are typically defined as jobs in occupations with low average wages and the skilled technical workforce is defined as occupations where most workers do not have a college degree and the job requires STEM or technical skills.

A key challenge to using occupational average characteristics is that there is substantial variation within occupations. In Table 1 in my recent ASR article, my colleagues and I demonstrate this variation for a set of low-wage occupations.

Read the whole article (open access) at the American Sociological Review.

For example, cashiers and food preparation workers are two large low-wage occupations with the high shares of low-wage workers. Yet only about half of workers in these occupations make below a $13 an hour low-wage threshold (in 2019 dollars). There is further variation in rates of occupational changes and upward wage mobility across low-wage occupations.

This variation leads us to develop conceptually and empirically our understanding of how occupations relate to economic mobility and economic inequality. Our key concept is occupational internal labor markets (OILMs). OILMs are skill and institutional linkages between clusters of occupations that provide the pathways for workers’ upward wage mobility.

The OILMs concept shifts the focus from thinking of occupations as discrete categories towards thinking of occupations as continuously linked nodes in a network view of the labor market. This shift provides a way to understand how workers (and different groups of workers) experience different opportunities and constraints given their position in the labor market.

Occupational average characteristics can lead to describing occupations using a good/bad dichotomy that is associated with dual labor market theory. Taking occupational variation seriously requires a more complex and nuanced understanding of job quality.