Specific Capital and Technological Variety

Boyan Jovanovic () and Peter Rousseau ()

No 13998, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Growth of technological variety offers more scope for the division of labor. And when a division of labor requires some specific training, the technological specificity of human capital grows and, with it, probably the firm specificity of that capital. We build a simple model that captures this observation. The model implies that a rising specialization of human and physical capital raises the rents in the average match between a firm and its human and physical capital. We document that in the last 40 years the firm's share of those rents has also grown, and we use the model to explain why this shift may have taken place.

JEL-codes: O0 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dev, nep-dge and nep-hrm
Date: 2008-05
Note: PR
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