Bobba, Matteo, Flabbi, Luca, Levy, Santiago and Tejada, Mauricio (2021) Labor market search, informality, and on-the-job human capital accumulation. Journal of Econometrics, vol. 223 (n° 2). pp. 433-453.

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Identification Number : 10.1016/j.jeconom.2019.05.026


We develop a search and matching model where rms and workers produce output that depends both on match-specic productivity and worker-specic human capital. The human capital is accumulated while working but depreciates while searching for a job. Jobs can be formal or informal. The model is estimated on labor market data for Mexico. Human capital accumulation is responsible for more than half of the overall value of production, and upgrades more quickly while working formally than informally. Policy experiments reveal that human capital accumulation magnies the negative impact on productivity of the labor market institutions that give raise to informality.

Item Type: Article
Language: English
Date: August 2021
Refereed: Yes
Uncontrolled Keywords: Labor market frictions, Search and matching, Nash bargaining, Informality, Onthe Job human capital accumulation.
JEL Classification: J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
J3 - Wages, Compensation, and Labor Costs
J64 - Unemployment - Models, Duration, Incidence, and Job Search
O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements - Legal, Social, Economic, and Political
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 17 Jun 2019 13:52
Last Modified: 14 Sep 2021 15:41
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