A Model of Human Capital Formation and Contractual Unpredictability

Nick Frazier (npfrazier@gmail.com) and Flavio Cunha
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Flavio Cunha: Rice univesity

No 1204, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: We study the effect of restricting the contracting space within a partial equilibrium environment. We develop a model of human capital accumulation where jobs have multiple characteristics including variability in hours and wages. We highlight the difficulties of using standard panel data to estimate and distinguish between worker preferences and the primitives of the offer function --- an issue with serious implications when comparing employee welfare. We propose using stated preferences data to trace out worker preferences over a variety of job attributes which we then take to the NLSY97 to recover the parameters underlying the distribution of job offers allowing for dependence on accumulated human capital. This approach provides a richer characterization of the process and permits us to quantify the effect of restricting the offer space on the labor force directly.

Date: 2016
New Economics Papers: this item is included in nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:1204

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