Multilevel Analysis of Occupational Structure and Varying Returns to Credentials in the U.S. Labor Market

• In Event: Organizations, Occupations, and Work Section Roundtables
  In Refereed Roundtable (90 minute): Table 11: Higher Education and Occupations

Abstract

College graduates in the United States enter a labor market in which occupations structure access to earnings, status, and economic opportunity. However, research on salary inequality among college-educated workers has primarily emphasized individual characteristics while giving less attention to the structural role of occupations in shaping earnings. Using the 2021 National Survey of College Graduates, this study estimates hierarchical linear models that nest 81,563 employed respondents within 124 occupational categories to examine three questions: (1) the proportion of salary variation attributable to differences between occupations versus individuals, (2) the effects of educational attainment and sociodemographic characteristics on salaries net of occupational clustering, and (3) whether returns to education and gender-based salary disparities vary across occupations. Results from the unconditional model indicate substantial occupational stratification, with 26 percent of the total variance in log salaries attributable to between-occupation differences. Models incorporating individual-level predictors show that advanced degrees are associated with significantly higher salaries, while women earn less than men and racial and ethnic disparities persist net of education, age, work hours, employer size, and employer type. Models allowing random slopes suggest significant cross-occupational heterogeneity in both educational returns and gender penalties, indicating that occupations differ not only in average salary levels but also in how they translate educational credentials into earnings and in the magnitude of gender inequality. These findings suggest occupations as key institutional mechanisms that mediate the economic returns to education and structure inequality among college graduates. Future analyses will investigate more on the measure of field-of-study and occupation alignment to examine how credential-occupation matching shapes salary outcomes.

Author

• Jingqin Ji, University of Florida