A DYNAMIC-MODEL OF OCCUPATIONAL CHOICE

A dynamic model of occupational choice is developed where, within an occupation, the match at the current job may help forecast matches at future jobs. An index policy is shown to be optimal. Each occupation is assigned an index and the occupation with the highest index is sampled. When training costs are low and layoff risks are nonnegligible, occupations in which job-matching information is relatively occupation-specific receive higher indices. However, this result is reversed when training costs are sufficiently high. © 1991.