Working Paper: NBER ID: w13603
Authors: Gary D. Hansen; Selo Imrohoroglu
Abstract: We study the effects of on-the-job skill accumulation on average hours worked by age and the volatility of hours over the life cycle in a calibrated general equilibrium model. Two forms of skill accumulation are considered: learning by doing and on-the-job training. In our economy with learning by doing, individuals supply more labor early in the life cycle and less as they approach retirement than they do in an economy without this feature. The impact of this feature on the volatility of hours over the life cycle depends on the value of the intertemporal elasticity of labor supply. When individuals accumulate skills by on-the-job training, there are only weak effects on both the steady-state labor supply and its volatility over the life cycle.
Keywords: business cycles; skill accumulation; labor supply; life cycle
JEL Codes: E32; J22; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Learning by doing (C90) | Increased labor supply early in life (J20) |
| Learning by doing (C90) | Decreased labor supply as individuals approach retirement (J26) |
| Learning by doing (C90) | Labor supply changes (J20) |
| Labor supply elasticity (J20) | Effect of learning by doing on labor supply (J24) |
| On-the-job training (M53) | Labor supply (J22) |