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Human Capital Specificity: Direct and Indirect Evidence from Canadian and US Panels and Displaced Worker Surveys

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Abstract

Recent papers by Neal (1995) and Parent (2000), using different methods, provided evidence in support of the hypothesis that previously estimated firm tenure effects are, in fact, capturing industry specific human capital investments due to a correlation between firm and industry tenure. This paper uses both methods applied to both US and Canadian data sets to provide evidence in support of an alternative hypothesis that human capital is, for the most part, not narrowly specific to firm or industry. An analysis using either the indirect method of Neal, or the direct approach of Parent, provides evidence against the importance of industry specific capital and in favor of broad skill based specificity.

Suggested Citation

  • Maxim Poletaev & Chris Robinson, 2004. "Human Capital Specificity: Direct and Indirect Evidence from Canadian and US Panels and Displaced Worker Surveys," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20042, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    • Handle: RePEc:uwo:hcuwoc:20042
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    File URL: https://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1041&context=economicscibc
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    1. Maxim Poletaev & Chris Robinson, 2003. "Human Capital and Skill Specificity," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20036, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    2. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    3. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-261, April.
    4. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    5. Brown, James N & Light, Audrey, 1992. "Interpreting Panel Data on Job Tenure," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 219-257, July.
    6. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
    7. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-677, October.
    8. repec:eee:labchp:v:1:y:1986:i:c:p:525-602 is not listed on IDEAS
    9. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
    10. repec:eee:labchp:v:2:y:1986:i:c:p:789-848 is not listed on IDEAS
    11. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
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    1. Maxim Poletaev & Chris Robinson, 2008. "Human Capital Specificity: Evidence from the Dictionary of Occupational Titles and Displaced Worker Surveys, 1984-2000," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 387-420, July.
    2. Ignez M. Tristao, 2007. "Occupational Employment Risk and its Consequences for Unemployment Duration and Wages: Working Paper 2007-01," Working Papers 18287, Congressional Budget Office.

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