What determines the earnings of a worker relative to his peers in the same occupation? What makes a
worker fail in one occupation but succeed in another? More broadly, what are the factors that determine the
productivity of a worker-occupation match? In this paper, we propose an empirical measure of skill mismatch
for a worker-occupation match, which sheds light on these questions. This measure is based on the
discrepancy between the portfolio of skills required by an occupation and the portfolio of abilities possessed
by a worker for learning those skills. This measure arises naturally in a dynamic model of occupational
choice and human capital accumulation with multidimensional skills and Bayesian learning about one’s
ability to learn these skills. In this model, mismatch is central to the career outcomes of workers: it reduces
the returns to occupational tenure, and it predicts occupational switching behavior. We construct our empirical
analog by combining data from the National Longitudinal Survey of Youth 1979 (NLSY79), the
Armed Services Vocational Aptitude Battery (ASVAB) on workers, and the O*NET on occupations. Our
empirical results show that the effects of mismatch on wages are large and persistent: mismatch in occupations
held early in life has a strong negative effect on wages in future occupations. Skill mismatch also
significantly increases the probability of an occupational switch and predicts its direction in the skill space.
These results provide fresh evidence on the importance of skill mismatch for the job search process.