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Human Capital Specificity: Direct and Indirect Evidence from Canadian and US Panels and Displaced Worker Surveys

Recent papers by Neal (1995) and Parent (2000), using different methods, provided evidence in support of the hypothesis that previously estimated firm tenure effects are, in fact, capturing industry specific human capital investments due to a correlation between firm and industry tenure. This paper uses both methods applied to both US and Canadian data sets to provide evidence in support of an alternative hypothesis that human capital is, for the most part, not narrowly specific to firm or industry. An analysis using either the indirect method of Neal, or the direct approach of Parent, provides evidence against the importance of industry specific capital and in favor of broad skill based specificity.

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Paper provided by University of Western Ontario, Centre for Human Capital and Productivity (CHCP) in its series University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers with number 20042.

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Date of creation: 2004
Date of revision:
Handle: RePEc:uwo:hcuwoc:20042
Contact details of provider: Postal:
Centre for Human Capital and Productivity (CHCP), Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2

Phone: 519-661-2111 Ext.85244
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  1. Brown, James N & Light, Audrey, 1992. "Interpreting Panel Data on Job Tenure," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 219-57, July.
  2. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
  3. Katharine G. Abraham & Henry S. Farber, 1986. "Job Duration, Seniority and Earnings," Working papers 407, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Derek Neal, 1998. "The Complexity of Job Mobility Among Young Men," NBER Working Papers 6662, National Bureau of Economic Research, Inc.
  5. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-77, October.
  6. Robert H. Topel, 1990. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," NBER Working Papers 3294, National Bureau of Economic Research, Inc.
  7. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
  8. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  9. 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).
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