Knowledge accumulation within an organization

We develop a simple model of task allocation for knowledge workers over their career within an organization. The human capital theory initiated by Becker (1962, 1964) has offered a rich analysis of an individual's life cycle investment in human capital. One of the main result of this literature states that human capital investments are undertaken at the early stage of the career because workers have then a longer period of time over which they can benefit from the return of their investments. In this paper, we consider a knowledge accumulation problem within an organization that cannot prevent the worker from quitting and using the knowledge outside the organization. In the first best situation, we show a similar result as in the human capital theory, i.e. the share of time allocated to knowledge creation tasks decreases over time. We then ask how this pattern is affected when the knowledge worker can leave the organization and benefit from this knowledge outside the organization. In this case, we obtain the novel result that the time path of the fraction of working time allocated to knowledge creation tasks is non-monotone. This fraction is highest at the early career stage, falls gradually, then rises again, before falling finally toward zero. We also show that an increase in the firm-specificity of knowledge can increase or decrease the life-time income of the knowledge worker.