Firm-Specific Human Capital: A Skill-Weights Approach

Edward Lazear

No 9679, NBER Working Papers from National Bureau of Economic Research, Inc

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 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.

JEL-codes: J24 M5 (search for similar items in EconPapers)
Date: 2003-05
New Economics Papers: this item is included in nep-lab and nep-ltv
Note: LS
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Citations: View citations in EconPapers (101)

Published as Edward P. Lazear, 2009. "Firm‐Specific Human Capital: A Skill‐Weights Approach," Journal of Political Economy, vol 117(5), pages 914-940.

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