Human Capital and Search Models: A Happy Match

Thierry Magnac

Revue économique, 2024, vol. 75, issue 1, 11-29

Abstract: We review a tractable model of human capital investments that can accommodate lots of heterogeneity and we investigate its compatibility with some job search and equilibrium wage models that have been proposed in the literature. We show that the log wage equation derived from the combination of these set-ups is additively separable in the process of human capital investments and the dynamic effects of the job ladder under a few conditions among which strict liquidity constraints and exogeneity of search are prominent. This is the case in particular with the popular model proposed by Bagger et al. [2014] in which the predicted wage equation can be generalized to accommodate richer heterogeneous effects due to endogenous human capital accumulation. JEL Codes: D31, I24, J24, J31, J64.

Keywords: human capital; job search; wage inequalities; applied econometrics (search for similar items in EconPapers)
JEL-codes: D31 I24 J24 J31 J64 (search for similar items in EconPapers)
Date: 2024
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