Accumulation of Human Capital and the Business Cycle
AbstractCharacteristics of business cycles are quite different across developed countries. Real wages and working hours a re less sensitive to exogenous shocks in the United States than in Brit ain and Japan. Using a model with a microeconomic foundation, this paper provides an economic explanation of these differences. The cost of on-the-job training plays a crucial role. Workers seldom quit their jobs when the sunk training cost is high. In such economies, varianc es in employment and output become small and shocks tend to be absorbed by working hours and real wages. Thus, these characteristics do not necessarily indicate that the economy is more efficient. Copyright 1993 by University of Chicago Press.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 101 (1993)
Issue (Month): 1 (February)
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- Shin-ichi Fukuda & Robert F. Owen, 2008. "Human Capital and Economic Growth : Dynamic Implications of Insider-outsider Problem for Macroeconomics," Macroeconomics Working Papers 22597, East Asian Bureau of Economic Research.
- Facundo Sepulveda & Fabio Mendez, 2011. "The cyclicality of skill acquisition: evidence from panel data," CAMA Working Papers 2011-13, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Kawai, Eizo, 2001. "Re-examination of wage, employment, and hours adjustments: what is crucial for differences in the adjustments?," Japan and the World Economy, Elsevier, vol. 13(4), pages 483-497, December.
- Kozo Kiyota & Toshiyuki Matsuura, 2006. "Employment of MNEs in Japan: New Evidence," Discussion papers 06014, Research Institute of Economy, Trade and Industry (RIETI).
- Shin-ichi Fukuda & Robert F. Owen, 2008. "Human Capital and Economic Growth: Dynamic Implications of Insider-outsider Problem for Macroeconomics," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 4(1), pages 133-158, December.
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