That human capital reduces inequality and increases productivity is a well-established result. Both links depend on the mix of human capital that individuals accumulate, i.e. on whether it is more specific or general. This paper fills a gap in the literature trying to measure whether workers accumulate disproportionally more general human capital than specific one. We exploit the temporary/permanent contract divide to measure the general/specific mix. In fact, theoretical considerations suggest that workers holding temporary contracts accumulate more general human capital than workers under permanent contracts. Using longitudinal matched employer-employee data, we find empirical support for this hypothesis, by showing that dismissed temporary workers are more likely to change economic sector than comparable workers losing their open-ended jobs. As labor market deregulation concerns raising shares of the workforce in all advanced economies, we should expect that future societies will increasingly rely on general skills rather than specific ones. This has implications for both inequality and productivity.

Human capital mix and temporary contracts: implications for productivity and inequality

BERTON, Fabio;DEVICIENTI, Francesco Serafino Michele;PACELLI, Lia
2016

Abstract

That human capital reduces inequality and increases productivity is a well-established result. Both links depend on the mix of human capital that individuals accumulate, i.e. on whether it is more specific or general. This paper fills a gap in the literature trying to measure whether workers accumulate disproportionally more general human capital than specific one. We exploit the temporary/permanent contract divide to measure the general/specific mix. In fact, theoretical considerations suggest that workers holding temporary contracts accumulate more general human capital than workers under permanent contracts. Using longitudinal matched employer-employee data, we find empirical support for this hypothesis, by showing that dismissed temporary workers are more likely to change economic sector than comparable workers losing their open-ended jobs. As labor market deregulation concerns raising shares of the workforce in all advanced economies, we should expect that future societies will increasingly rely on general skills rather than specific ones. This has implications for both inequality and productivity.
POLITICA ECONOMICA
32
1
27
46
https://www.rivisteweb.it/issn/1120-9496
specific human capital, general human capital, temporary work
F. Berton; F. Devicienti; L. Pacelli
File in questo prodotto:
File Dimensione Formato  
Berton-Devicienti-Pacelli 2016 PEJEP EDITORIALE.pdf

non disponibili

Tipo di file: PDF EDITORIALE
Dimensione 136.71 kB
Formato Adobe PDF
136.71 kB Adobe PDF   Visualizza/Apri   Richiedi una copia
Berton-Devicienti-Pacelli 2016 PEJEP PREPRINT.pdf

accesso aperto

Tipo di file: PREPRINT (PRIMA BOZZA)
Dimensione 772.67 kB
Formato Adobe PDF
772.67 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2318/145572
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 0
  • ???jsp.display-item.citation.isi??? 0
social impact