Working Paper: CEPR ID: DP3599
Authors: Yongsung Chang; Joao Gomes; Frank Schorfheide
Abstract: This Paper suggests that skill accumulation through past work experience, or ?learning-by-doing? (LBD), can provide an important propagation mechanism in a dynamic stochastic general equilibrium model, as the current labour supply affects future productivity. Our econometric analysis uses a Bayesian approach to combine micro-level panel data with aggregate time series. Formal model evaluation shows that the introduction of the LBD mechanism improves the model's ability to fit the dynamics of aggregate output and hours.
Keywords: Business Cycles; Labour Supply; Learning by Doing; Propagation
JEL Codes: C52; E32; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| past labor supply (J20) | current productivity (E23) |
| skill accumulation through past work experience (J24) | productivity (O49) |
| current labor supply (J20) | future productivity (O49) |
| increase in hours (J22) | increase in labor productivity (O49) |