Formal training, on-the-job training and the allocation of time

Tor Einarsson*, Milton H. Marquis

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

A macroeconomic model is developed that incorporates a technology for on-the-job training into the endogenous growth model of Lucas (1988) and Uzawa (1965) in a manner that is consistent with the human capital explanations of certain robust features of wage profiles from the U.S. economy. The model predicts procyclical investment in human capital through on-the-job training, which moderates the excess volatility in employment that is otherwise present due to the strong countercyclical investment in human capital through formal training. Predictions for aggregate labor market fluctuations are thus rendered more consistent with the postwar U.S. data than those of the Lucas-Uzawa endogenous growth model, where human capital accumulates solely through formal training.

Original languageEnglish
Pages (from-to)423-442
Number of pages20
JournalJournal of Macroeconomics
Volume21
Issue number3
DOIs
Publication statusPublished - 1999

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