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Firm-Specific Human Capital: A Skill-Weights Approach

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  • Edward P. Lazear

Abstract

The theory of human capital is agnostic on what constitutes firm-specific skills. The theory specifies that specific skills contribute to productivity only at the current firm. A broader approach lets all skills be general, but firms use them with different weights attached. For example, computer programming, economics, and accounting are general skills, but there may be only one firm that wants workers trained in all three. One implication is that wage profiles and the split of human capital costs depend on thickness of the market. Another is that firms pay for what appears to be general training. (c) 2009 by The University of Chicago. All rights reserved.

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  • Edward P. Lazear, 2009. "Firm-Specific Human Capital: A Skill-Weights Approach," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 914-940, October.
  • Handle: RePEc:ucp:jpolec:v:117:y:2009:i:5:p:914-940
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    References listed on IDEAS

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    1. Regula Geel & Johannes Mure & Uschi Backes-Gellner, 2011. "Specificity of occupational training and occupational mobility: an empirical study based on Lazear’s skill-weights approach," Education Economics, Taylor & Francis Journals, vol. 19(5), pages 519-535, January.
    2. Etienne Wasmer, 2006. "General versus Specific Skills in Labor Markets with Search Frictions and Firing Costs," American Economic Review, American Economic Association, vol. 96(3), pages 811-831, June.
    3. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-562, October.
    4. Chang, Chun & Wang, Yijiang, 1996. "Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 505-519, July.
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