Download The Specificity of Human Capital Investment under Agent

The Specificity of Human Capital Investment
under Agent Heterogeneity and Market Frictions:
Theory and Empirics
by Tomáš Jagelka (Ecole Polytechnique – CREST)
Comments
by Filippo Gregorini (Eurostat – European Commission)
LIS/LWS Users Conference 2017
Esch-sur-Alzette, 27 April 2017
For a model there is no need to ask the
question "Is the model true?"
If "truth" is to be the "whole truth" the
answer must be "No"
The only question of interest is "Is the model
illuminating and useful?"
• George Box, 1978
Labour Market Assumptions
1. Specific vs general skills: general ones more
"adaptable"
2. Rigidity -> Frictions (unemployment) ->
(Investment in) specific skills
• No clear evidence on point 2
Theoretical Model - Definition
1. "Talent augments workers' productivity (if they
invest in general skills)"
• Aren't we talking about having good soft skills?
Theoretical Model – Info / Timing
2. …"worker (who also knows his own "talent")
chooses his investment in human
capital…anticipating the outcome in term of
wages and job duration"…
• Skills to be acquired ex-ante
• (Correct) self-selection
• Anticipating labour market outcomes
OR
• labour market frictions (skills mismatch?) due to
self-selection bias?
Theoretical Model - Info
3. Do firms observe the "marginal productivity of
workers" at the time of hiring?
• If yes, no adverse selection (at the time of hiring)
and neither moral hazard (afterwards)
Theoretical Model - Adaptation
3. More talented (more soft-skilled) who invested
in general skills can support a wider range of
shocks while maintaining a productive match
Empirical Model – Job finding rate
• Transition probability rates
http://ec.europa.eu/eurostat/statisticsexplained/index.php/Labour_market_flow_statistics_in_the_EU
(1/2)
Empirical Model – Job finding rate
• Beveridge curve
(2/2)
http://ec.europa.eu/eurostat/statisticsexplained/index.php/Job_vacancy_and_unemployment_rates_-_Beveridge_curve
Empirical Results – Edu System(s)
• The German education system is semi-rigid (with
differences at Länder level) and the labour
market is performing well.
• Even restricting the analysis at European level we
observe heterogeneity in both the two
dimensions: rigidity of the educational system
and labour market performance.
"Is the model illuminating and useful?"
• Interesting topics (for me in particular)
• "Talent" (however defined) in relation to labour market
• Few studies on this because of limited data availability
http://ec.europa.eu/eurostat/web/products-statisticalworking-papers/-/KS-TC-16-023