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Labor market search, informality, and on-the-job human capital accumulation

Author

Listed:
  • Matteo Bobba

    (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Luca Flabbi

    (Unknown)

  • Santiago Levy

    (Unknown)

  • Mauricio Tejada

    (Unknown)

Abstract

We develop a search and matching model where rms and workers produce output that depends both on match-specic productivity and worker-specic human capital. The human capital is accumulated while working but depreciates while searching for a job. Jobs can be formal or informal. The model is estimated on labor market data for Mexico. Human capital accumulation is responsible for more than half of the overall value of production, and upgrades more quickly while working formally than informally. Policy experiments reveal that human capital accumulation magnies the negative impact on productivity of the labor market institutions that give raise to informality.

Suggested Citation

  • Matteo Bobba & Luca Flabbi & Santiago Levy & Mauricio Tejada, 2021. "Labor market search, informality, and on-the-job human capital accumulation," Post-Print hal-03248487, HAL.
  • Handle: RePEc:hal:journl:hal-03248487
    DOI: 10.1016/j.jeconom.2019.05.026
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-03248487
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    1. Salvador Valdés & Samuel Leyton, 2019. "Social insurance contributions: frequency vs. Earnings," Documentos de Trabajo 528, Instituto de Economia. Pontificia Universidad Católica de Chile..

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    More about this item

    Keywords

    Labor market frictions; Search and matching; Nash bargaining; Informality; Onthe Job human capital accumulation.;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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