Firm-Specific Human Capital: A Skill-Weights Approach

Edward Lazear

No 813, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: One problem with the theory of firm-specific human capital is that it is difficult to generate convincing examples of investment that could generate the sometimes observed large and continuing effects on earnings. Another approach, called the “skill-weights” view, allows all skills to be general in that there are other firms that use the each of the skills. But firms use them in different combinations and with different weights attached to them. The skill-weights view not only has aesthetic appeal, but is consistent with the frequently observed large tenure effects. All of the implications of the traditional view are produced by this approach, and there are a number of other implications that distinguish the new view from the traditional one. The empirical evidence already contains some support for the skill-weights view.

Keywords: skill-weights; skills; human capital (search for similar items in EconPapers)
JEL-codes: J24 M5 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2003-06
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Citations: View citations in EconPapers (92)

Published - Journal of Political Economy, 2009, 117 (5), 914 - 940

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Journal Article: Firm-Specific Human Capital: A Skill-Weights Approach (2009)
Working Paper: Firm-Specific Human Capital: A Skill-Weights Approach (2003)
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