Labor-Market Frictions, Human Capital Accumulation, And Long-Run Growth: Positive Analysis And Policy Evaluation
Journal
International Economic Review
Journal Volume
52
Journal Issue
1
Pages
131-160
Date Issued
2011
Author(s)
Abstract
We construct a search model with endogenous human capital and labor participation to study the growth effects of short-run frictions and the effectiveness of human capital policies. Employment, learning effort, and output growth increase with more effective learning, better labor-market matching, lower job separation, or less costly vacancy creation. Although output growth, employment, vacancy creation, and learning and search effort are most responsive to changes in a human capital policy that directly affects learning effort, such a policy need not be more beneficial for welfare. The effects of human capital policies become larger as the severity of labor-market frictions rises.
SDGs
Type
journal article