Cavounidis, Costas and Lang, Kevin (2020) Ben-Porath meets Lazear : microfoundations for dynamic skill formation. Journal of Political Economy, 128 (4). pp. 1405-1435. doi:10.1086/705373 ISSN 0022-3808.

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Abstract

We provide microfoundations for dynamic skill formation with a model of investment in multiple skills, when jobs place different weights on skills. We show that credit constraints may affect investment even when workers do not exhaust their credit. Firms may invest in their workers’ skills even when there are many similar competitors. Firm and worker incentives can lead to overinvestment. Optimal skill accumulation resembles—but is not—learning by doing. An example shows that shocks to skill productivity benefiting new workers but lowering one skill’s value may adversely affect even relatively young workers, and adjustment may be discontinuous in age.

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Economics
Journal or Publication Title:	Journal of Political Economy
Publisher:	University of Chicago Press
ISSN:	0022-3808
Official Date:	19 April 2020
Dates:	Date Event 19 April 2020 Published 19 February 2020 Available 25 January 2019 Accepted
Volume:	128
Number:	4
Page Range:	pp. 1405-1435
DOI:	10.1086/705373
Status:	Peer Reviewed
Publication Status:	Published
Reuse Statement (publisher, data, author rights):	© 2019 by University of Chicago Press. Accepted for publication to Journal of Political Economy on 01/25/2019
Access rights to Published version:	Restricted or Subscription Access
Date of first compliant deposit:	29 January 2019
Date of first compliant Open Access:	8 July 2020
Related URLs:	Publisher

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