Career Specialization, Involuntary Worker–Firm Separations, and Employment Outcomes: Why Generalists Outperform Specialists When Their Jobs Are Displaced

Abstract

Existing theories offer conflicting perspectives regarding the relationship between career specialization and labor market outcomes. While some scholars argue it is better for workers to specialize and focus on one area, others argue it is advantageous for workers to diversify and compile experience across multiple work domains. We attempt to reconcile these competing perspectives by developing a theory highlighting the voluntary versus involuntary nature of worker–firm separations as a theoretical contingency that alters the relative advantages and disadvantages associated with specialized versus generalized careers. Our theory is rooted in the notion that the characteristics of involuntary worker–firm separations (i.e., job displacement) simultaneously amplify the disadvantages associated with specialized careers and the advantages associated with generalized careers, thereby giving displaced generalists a relative advantage over displaced specialists. We find support for our theory in the context of U.S. congressional staffing, using administrative employment records and a regression discontinuity identification strategy that exploits quasi-random staffer displacement resulting from narrowly decided congressional reelection bids. Our theoretical contingency is further supported in supplemental regressions where correlational evidence suggests that while specialists tend to be relatively penalized in the labor market after involuntary separations, specialists appear to be relatively privileged when separations are plausibly voluntary.