A Multi-Stage Framework with Taxonomy-Guided Reasoning for Occupation Classification Using Large Language Models

Abstract: Automatically annotating job data with standardized occupations from taxonomies, known as occupation classification, is crucial for labor market analysis. However, this task is often hindered by data scarcity and the challenges of manual annotations. While LLMs hold promise due to their extensive world knowledge and in-context learning capabilities, their effectiveness depends on their knowledge of occupational taxonomies, which remains unclear. In this study, we assess the ability of LLMs to generate precise taxonomic entities from taxonomy, highlighting their limitations. To address these challenges, we propose a multi-stage framework consisting of inference, retrieval, and reranking stages, which integrates taxonomy-guided reasoning examples to enhance performance by aligning outputs with taxonomic knowledge. Evaluations on a large-scale dataset show significant improvements in classification accuracy. Furthermore, we demonstrate the framework's adaptability for multi-label skill classification. Our results indicate that the framework outperforms existing LLM-based methods, offering a practical and scalable solution for occupation classification and related tasks across LLMs.