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Measuring the Specificity of Human Capital:a Skill-based Approach

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  • Kristjan-Olari Leping

    () (University of Tartu Pärnu College)

Abstract

This article will construct a skill-based measure for human capital specificity. The measure is based on the possibilities of making use of skills on the labour market, which depends on the number of jobs where any particular skill is required. The assumption is that the specificity of human capital depends on the specificity of skills. In order to calculate the levels of specificity of different skills empirically, data from the skill requirements of vacant jobs are used. The validity of this measure is tested by using it as an estimator of the probability that on-the-job training is offered to employees. This article also investigates differences in the specificity of required human capital between different industries and occupations. The proposed job specificity measure can be used for planning public sector support to on-the-job training as companies’ decisions to pay for training depend on the specificity of human capital required.

Suggested Citation

  • Kristjan-Olari Leping, 2009. "Measuring the Specificity of Human Capital:a Skill-based Approach," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(1), pages 39-54, July.
  • Handle: RePEc:bic:journl:v:9:y:2009:i:1:p:39-54
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    References listed on IDEAS

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    2. Ingram, Beth & Neumann, George, 1999. "An Analysis of the Evolution of the Skill Premium," Working Papers 99-08, University of Iowa, Department of Economics.
    3. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 1001-1026.
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    5. Uschi Backes-Gellner & Johannes Mure, 2005. "The Skill-Weights Approach on Firm Specific Human Capital: Empirical Results for Germany," Working Papers 0056, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Apr 2005.
    6. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    7. Maxim Poletaev & Chris Robinson, 2003. "Human Capital and Skill Specificity," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20036, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    8. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-677, October.
    9. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
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    13. Mortensen, Dale T, 1988. "Wages, Separations, and Job Tenure: On-the-Job Specific Training or Matching?," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 445-471, October.
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    More about this item

    Keywords

    human capital; skills; on-the-job training;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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