Skill Accumulation in the Search Unemployment Model |
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Authors: | Yong Kim |
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Institution: | 1. School of Economics, Yonsei University, Seoul, Republic of Koreayongkim@yonsei.ac.kr |
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Abstract: | ABSTRACTI analyze general skill accumulation (training) and its financing among labor market entrants in a search unemployment equilibrium. Becker's general skill finance rule is modified for a search economy: although skill accumulation is associated with a hold-up problem, since it benefits future job vacancies which workers expect to be matched with, if vacancies direct their search to workers of different skill levels, workers internalize this externality. An extended model analyzes whether to accumulate skills through training or education. Small differences in the relative cost of acquiring education can lead to large differences in skill levels in the labor market. |
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Keywords: | Search skill accumulation unemployment efficiency education training |
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