by most workers to become fully qualified” in an occupation.
The third measure, skill,
is the level of “complex problem solving skills” required in an occupation. This variable
comes from the U.S. Department of Labor’s Occupational Information Network, which
ranks occupations based on the importance and level of knowledge, skills, and abilities
required to perform the typical job functions.
The fourth measure, wage, is the mean
hourly wage for the occupation in 2001.
These four measures each capture important elements of labor skills that are not
contained in the others. At the same time, there is substantial overlap among the different
measures. Table 6 displays pairwise correlations for education, training, skill, and wage.
These correlations vary from 0.672 to 0.828, and all are significant at the p<.001 level.
As a result, the probit analysis estimates separate models for each of the four measures,
with no preconceptions about which most closely approximates the unobservable level of
skill involved in an occupation.
Table 6. Pairwise Correlations for Education, Training, Skill, and Wage
Along with the proxy measures for labor skills, the analysis includes control
variables. Premium is the mean hourly wage for the occupation in the motion picture
31
The analysis drops one of the eleven categories in the BLS Occupational Outlook Handbook, “first
professional degree,” because it is not present in the data for the motion picture industry. The categories
and codes are as follows: short-term on-the-job training (1); moderate-term on-the-job training (2); long-
term on-the-job training (3); work experience in a related occupation (4); vocational training (5); associate
degree (6); bachelor’s degree (7); bachelor’s or graduate degree, plus work experience (8); master’s degree
(9); doctoral degree (10).
32
These rankings range from 0 (“not important or none required”) to 100 (“very important or high level
required”). In this analysis, the descriptor that best corresponds to raw skill without being specific to any
particular type of work is “complex problem solving skills,” which the Occupational Information Network
describes as “[i]dentifying complex problems and reviewing related information to develop and evaluate
options and implement solutions.” “Skills– Complex Problem Solving,” O*Net Online,
.
28
Convention