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Human Capital Accumulation and the Intertemporal Elasticity of Substitution of Labor: How Large is the Bias?

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  • Johanna Wallenius

    (Stockholm School of Economics)

Abstract

I consider two different skill accumulation technologies, learning by doing and Ben-Porath type training. The effect of human capital accumulation in the form of learning by doing is to increase the labor supply elasticity estimate by a factor of 2.1 relative to the estimate that ignores human capital accumulation. The results are similar for the Ben Porath type training technology, although the estimate of the bias is somewhat higher. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/j.red.2011.06.002
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 14 (2011)
Issue (Month): 4 (October)
Pages: 577-591

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Handle: RePEc:red:issued:10-106

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Keywords: Intertemporal elasticity of substitution; Human capital; Life cycle; Labor supply;

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References

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  15. Burhanettin Kuruscu, 2006. "Training and Lifetime Income," American Economic Review, American Economic Association, vol. 96(3), pages 832-846, June.
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Citations

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Cited by:
  1. Edward C. Prescott & Johanna Wallenius, 2012. "Aggregate labor supply," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Oct.
  2. Blundell, Richard & Pistaferri, Luigi & Saporta-Eksten, Itay, 2014. "Consumption inequality and family labor supply," Working Paper Series 1656, European Central Bank.
  3. Riccardo Fiorito & Giulio Zanella, 2012. "The Anatomy of the Aggregate Labor Supply Elasticity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 171-187, April.
  4. William B. Peterman, 2011. "Determining the motives for a positive optimal tax on capital," Finance and Economics Discussion Series 2011-55, Board of Governors of the Federal Reserve System (U.S.).
  5. Eric French & John Jones, 2012. "Public pensions and labor supply over the life cycle," International Tax and Public Finance, Springer, vol. 19(2), pages 268-287, April.
  6. Wallenius, Johanna, 2013. "Social security and cross-country differences in hours: A general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2466-2482.

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