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Appears in Collections:Accounting and Finance Working Papers
Title: Labor Market Pooling and Human Capital Investment Decisions
Author(s): Amend, Elke
Herbst, Patrick
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Citation: Amend E & Herbst P (2009) Labor Market Pooling and Human Capital Investment Decisions. SSRN Working Paper Series. Social Science Research Network.
Keywords: Human capital
labor market pooling
agglomeration economies
JEL Code(s): I20
Issue Date: 28-Sep-2009
Publisher: Social Science Research Network
Series/Report no.: SSRN Working Paper Series
Abstract: Labor market pooling is considered one of the advantages of agglomerations. This paper presents a model of human capital formation in an imperfectly competitive, pooled local labor market with heterogeneous workers and firms. Firms produce with different technologies requiring diverse skills. Workers specialize into specific skills and accumulate general human capital. While labor market pooling provides static efficiency gains, our results also imply positive long-term effects: Under a diversified structure, firm-specific shocks increase workers' incentives to acquire both general and specific human capital. This not only raises productivity but also strengthens a region's capability to adapt to change.
Type: Working or Discussion Paper
Rights: Author retains copyright.
Affiliation: Institut fur Arbeitsmarkt und Berufsforschung (IAB), Germany
Accounting and Finance

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