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Skill obsolescence, vintage effects and changing tasks

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  • Simon Janssen

    ()
    (Department of Business Administration, University of Zurich)

  • Uschi Backes-Gellner

    ()
    (Department of Business Administration, University of Zurich)

Abstract

Human capital is no doubt one of the most important factors for future economic growth and well-being. However, human capital is also prone to becoming obsolete over time. Skills that have been acquired at one point in time may perfectly match the skill requirements at that time but may become obsolete as time goes by. Thus, in the following paper, we study the depreciation processes of the human capital of workers performing different types of tasks with different skill requirements over a period of more than twenty years. We argue that two types of tasks must be distinguished: knowledge-based tasks and experience-based tasks. Knowledgebased tasks demand skills depending on the actual stock of technological knowledge in a society whereas experience-based tasks demand skills depending on personal factors and individual experience values. We show, by applying Mincer regressions on four different cross sections, that the human capital of people performing knowledge-based tasks suffers more from depreciation than the human capital of individuals performing experience-based tasks.

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File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0063_lhwpaper.pdf
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Bibliographic Info

Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0063.

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Length: 34 pages
Date of creation: Dec 2008
Date of revision:
Publication status: published
Handle: RePEc:iso:educat:0063

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Keywords: Human Capital; Skills; Mincer regressions;

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References

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  1. Maria Arrazola & Jose de Hevia, 2004. "More on the estimation of the human capital depreciation rate," Applied Economics Letters, Taylor & Francis Journals, vol. 11(3), pages 145-148.
  2. Neuman, Shoshana & Weiss, Avi, 1995. "On the effects of schooling vintage on experience-earnings profiles: Theory and evidence," European Economic Review, Elsevier, vol. 39(5), pages 943-955, May.
  3. Richard Pomfret & Liang Choon Wang, 2003. "Evaluating The Research Output Of Australian Universities' Economics Departments," Australian Economic Papers, Wiley Blackwell, vol. 42(4), pages 418-441, December.
  4. Laing, Derek & Palivos, Theodore & Wang, Ping, 2003. "The economics of 'new blood'," Journal of Economic Theory, Elsevier, vol. 112(1), pages 106-156, September.
  5. Taylor, J Edward & et al, 2003. "The Economics of Ecotourism: A Galapagos Islands Economy-Wide Perspective," Economic Development and Cultural Change, University of Chicago Press, vol. 51(4), pages 977-97, July.
  6. Wenli Li & Pierre-Daniel G. Sarte, 2002. "The macroeconomics of U.S. consumer bankruptcy choice : chapter 7 or chapter 13?," Working Paper 02-01, Federal Reserve Bank of Richmond.
  7. Lin, Chung-cheng & Chen, Tze-wei & Lai, Ching-chong, 2003. "The economics of honeybee swarming," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 581-594, September.
  8. Yew-Kwang Ng, 2003. "From preference to happiness: Towards a more complete welfare economics," Social Choice and Welfare, Springer, vol. 20(2), pages 307-350, March.
  9. Wim Groot, 1998. "Empirical estimates of the rate of depreciation of education," Applied Economics Letters, Taylor & Francis Journals, vol. 5(8), pages 535-538.
  10. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
  11. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  12. Rosen, Sherwin, 1976. "A Theory of Life Earnings," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S45-67, August.
  13. Sherwin Rosen, 1975. "Measuring the Obsolescence of Knowledge," NBER Chapters, in: Education, Income, and Human Behavior, pages 199-232 National Bureau of Economic Research, Inc.
  14. Ning Wang, 2003. "Coase on the nature of economics," Cambridge Journal of Economics, Oxford University Press, vol. 27(6), pages 807-829, November.
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Cited by:
  1. Uschi Backes-Gellner, 2014. "Benefits of Apprenticeship Training and Recent Challenges Ð Empirical Results and Lessons from Switzerland and Germany," Economics of Education Working Paper Series 0097, University of Zurich, Institute for Strategy and Business Economics (ISU).
  2. Nathalie Greenan & Mathieu NARCY & Stéphane Robin, 2013. "Changements dans les entreprises et accès des seniors à la formation continue : une comparaison entre les années 1990 et 2000," Working Papers halshs-00965730, HAL.
  3. Simone Tuor & Uschi Backes-Gellner, 2009. "Time - Even More Costly Than Money: Training Costs of Workers and Firms," Economics of Education Working Paper Series 0046, University of Zurich, Institute for Strategy and Business Economics (ISU).

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