Looking for greener grass? Prior status and exploration-exploitation decisions in job search

Abstract

Research on the returns to specialist versus generalist careers has largely neglected what drives individuals’ motivations to build different career profiles in the first place. Although specialization is widely associated with benefits, generalist careers are seen as more at risk except in certain mitigated conditions. At the same time, given the uncertainty in labor markets, future returns to specialization cannot simply be assumed. We introduce in this paper a novel mechanism behind the formation of generalist careers, opportunity-enhancing generalism, whereby workers willingly give up the benefits to specialization to dissociate from a past expertise considered to yield relatively poor future prospects. On the premise that one’s prior experience provides the basis for exploration-versus-exploitation decisions, we argue that aspects of one’s previous jobs, including status, will importantly affect decisions about whether to continue specializing. Specifically, negative feedback about prospects for advancement in their prior jobs will increase workers’ motivation to search for jobs in new areas of expertise. Focusing on managerial workers’ job search decisions, we predict that individuals who come from low-status firms, low-status work domains, or both will be more likely to search for jobs in a new area than job seekers coming from high-status firms and work domains. Using data on job searches in a Master in Business Administration labor market, we find support for our prediction and suggestive evidence for the opportunity-enhancing mechanism we propose.