The Convergence of Occupations: Evidence from Online Job Posts

Abstract

We document, in the past decade, a reversal in the trend of increasing wage inequality and declining labor mobility patterns across occupations. This is despite a rapid increase in technological progress and increase in technical skills demanded as evident in online job advertisements. We argue that rapid technological progress over the past decade is transforming occupations and driving them closer together, leading to wage convergence and increased mobility. To study this, we introduce a novel measure of occupational distance based on job postings that allow us to represent each occupation as a vector of skills with corresponding weights that evolve over time and space. We compute bilateral distances between occupations using similarity measures and find a steady decline in these distances, indicating occupational convergence. We show that this convergence has led to a decline in wage inequality across occupations and increased labor mobility. Furthermore, we find that occupations that have undergone greater transformation-measured as self-distance over time-exhibit higher wage growth and larger reductions in within-occupation inequality.