Open Access

Patt Alexander

• In this cumulative dissertation, I investigate the relation between the cognitive complexity of work tasks and economic outcomes such as earnings, migration, and aggregate income growth. Existing theoretical and empirical research firmly established that human capital plays a major role in determining these outcomes. However, the literature to date has focused on a limited set of human capital measures, such as education, years of work experience, and basic demographic characteristics, and has largely ignored considerable individual variation attributable to occupational skills. By introducing novel skill measures derived from work tasks and using theoretical models combined with empirical evidence, I demonstrate the determining role played by occupational skills. The first paper examines the connection between problem solving and lifecycle wage dynamics. I introduce a model of learning-by-doing which relates the intensity of complex tasks to the growth of problem solving skills and labour productivity. Using German administrativeIn this cumulative dissertation, I investigate the relation between the cognitive complexity of work tasks and economic outcomes such as earnings, migration, and aggregate income growth. Existing theoretical and empirical research firmly established that human capital plays a major role in determining these outcomes. However, the literature to date has focused on a limited set of human capital measures, such as education, years of work experience, and basic demographic characteristics, and has largely ignored considerable individual variation attributable to occupational skills. By introducing novel skill measures derived from work tasks and using theoretical models combined with empirical evidence, I demonstrate the determining role played by occupational skills. The first paper examines the connection between problem solving and lifecycle wage dynamics. I introduce a model of learning-by-doing which relates the intensity of complex tasks to the growth of problem solving skills and labour productivity. Using German administrative data, I find that workers in complex jobs receive static and dynamic wage premia and acquire relatively more human capital throughout life. The second paper examines the selection pattern of Mexican migrants to the United States and shows that Mexican migrants have lower cognitive skills and higher manual skills compared to non-migrants. Using an extended version of the Roy-Borjas model, I show that differences in the returns to occupational skills explain the selection pattern better than differences in the returns to education and basic characteristics. The third paper explores the role that complexity plays in economic development. I develop a regional model of endogenous growth which relates aggregate problem solving skills to the rate of technology adoption. In the model, migration costs and spillovers in technology adoption create persistent differences in regional income. By estimating growth regressions, I find that problem solving skills strongly predict per capita income growth in a sample of European regions. The results collected in the dissertation have implications for economic development policies focused on human capital, projection and analysis of international migration, and evaluating long-term effects of recessions.…