The Business Cycle Human Capital Accumulation Nexus and its Effect on Labor Supply Volatility
AbstractThis paper studies the cyclicality of human capital accumulation by using a lifecycle RBC model with two types of heterogeneity: age and productivity in learning. Results show that individuals invest more in human capital during economic downturns. In particular, schooling acts as a buffer sector and allows agents to compensate for the shock by accumulating more human capital. However, human capital accumulation is more countercyclical for young and low-productivity individuals because they face lower opportunity costs of education and a higher marginal product of human capital. These results are confirmed empirically using US data from the Current Population Survey.
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Bibliographic InfoPaper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 62_12.
Date of creation: Aug 2012
Date of revision:
human capital accumulation; business cycles; labor supply;
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-22 (All new papers)
- NEP-DGE-2012-09-22 (Dynamic General Equilibrium)
- NEP-HRM-2012-09-22 (Human Capital & Human Resource Management)
- NEP-LAB-2012-09-22 (Labour Economics)
- NEP-LMA-2012-09-22 (Labor Markets - Supply, Demand, & Wages)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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