Working Paper: NBER ID: w21702
Authors: Rasmus Lentz; Nicolas Roys
Abstract: The paper studies human capital accumulation over workers' careers in an on the job search setting with heterogenous firms. In renegotiation proof employment contracts, more productive firms provide more training. Both general and specific training induce higher wages within jobs, and with future employers, even conditional on the future employer type. Because matches do not internalize the specific capital loss from employer changes, specific human capital can be over-accumulated, more so in low type firms. While validating the Acemoglu and Pischke (1999) mechanisms, the analysis nevertheless arrives at the opposite conclusion: That increased labor market friction reduces training in equilibrium.
Keywords: human capital; training; on-the-job search; labor market frictions; wage dynamics
JEL Codes: D21; D43; D83; E24; J24; J31; J33; J41; J62; J63; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Firm Productivity (D21) | Training (M53) |
| Training (M53) | Wages (J31) |
| Firm Productivity (D21) | Wages (J31) |
| Training Type (M53) | Wages (J31) |
| Labor Market Friction (J29) | Training (M53) |
| Firm Type (L20) | Training (M53) |
| Firm Type (L20) | Specific Human Capital Overaccumulation (J24) |