More on the estimation of the human capital depreciation rate

Arrazola, María; Hevia, José de

doi:10.1080/1350485042000203742

Cited by 44 publications

(32 citation statements)

References 9 publications

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“…others reported in the literature, especially with those obtained by Hansen (1993) and Altig et al (2001). The estimate of δ h = 0.011 is reasonable (Arrazola andde Hevia (2004), Browning, Hansen, andHeckman (1999)), and the estimate of ψ = 0.67 is just in the middle of the range reported in Browning, Hansen, and Heckman (1999). …”

Section: Individual Productivity Profilessupporting

confidence: 62%

Demographic Change, Human Capital and Welfare

2010

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This paper employs a large scale overlapping generations (OLG) model with endogenous human capital formation using a Ben-Porath (1967) technology to evaluate the quantitative role of human capital adjustments for the economic consequences of demographic change. We find that endogenous human capital formation is a quantitatively important adjustment mechanism which substantially mitigates the macroeconomic impact of population aging. On the aggregate level, the predicted decrease of the rate of return to physical capital is only one third of the predicted decrease in a standard model with a fixed human capital profile. In terms of welfare, while young agents with little assets gain up to 0.8% in consumption from increasing wages in both models, welfare losses from decreasing returns of older and asset rich households are substantial. But importantly, these losses are about 50 − 70% higher in the model without endogenous human capital formation. Ignoring this adjustment channel thus leads to quantitatively important biases of the welfare assessment of demographic change. We also document that not reforming the social security system but letting contribution rates increase will largely offset any positive welfare effects for future generations. JEL classification: C68, E17, E25, J11, J24

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Section: Individual Productivity Profilessupporting

confidence: 62%

Demographic Change, Human Capital and Welfare

2010

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“…The learning literature agrees that experience depreciates over time: that is, experience gained recently is more important for success than experience gained longer ago (e.g., Arrazola and Hevia 2004;Arthur and Huntley 2005;Boone et al 2008;Darr et al 1995;Groot 1998;Madsen and Desai 2010). However, consensus is lacking regarding the depreciation rate of experience, with depreciation rates being reported that range from 67 to 96 % per month Benkard 2000;Epple et al 1996) to 11-17 % per year (Groot 1998).…”

Section: The Datamentioning

confidence: 92%

The entrepreneur’s experiential diversity and entrepreneurial performance

Spanjer

Witteloostuijn

2017

Small Bus Econ

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This study examines the relationship between the entrepreneur's experiential diversity and entrepreneurial performance. First, we argue that entrepreneurial and industry experiences are positively associated with performance. Second, by combining Lazear's jacks-ofall-trades theory with the cognition and learning literatures, an inverted U-shaped experience diversityperformance relationship is predicted. The hypotheses are tested using data from the US National Labor Survey Youth 1979 and O*NET. We find that industry experience is positively associated with performance, but entrepreneurial experience is negatively related. Moreover, experience diversity measured in terms of skills is found to be positively associated with performance up to a certain threshold. After this threshold, an increase in an entrepreneur's experiential diversity lowers performance. Entrepreneurs with 23 different skills have the highest performance. Furthermore, when depreciating for experience, experience diversity measured in terms of both skills and knowledge is found to be positively related to performance.

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“…However, apart from that, most studies focus on wages. While some try to measure the rate of depreciation exactly, such as Arrazola and de Hevia (2004) or Groot (1998), others focus more on the detection of vintage effects or depreciation in general (Neuman & Weis 1995, Weiss & Lillard 1978.…”

Section: Literature and Theorymentioning

confidence: 99%

Skill Obsolescence, Vintage Effects and Changing Tasks

Janssen¹,

Backes‐Gellner²

2009

AEQ

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Human capital is no doubt one of the most important factors for future economic growth and well-being. However, human capital is also prone to becoming obsolete over time. Skills that have been acquired at one point in time may perfectly match the skill requirements at that time but may become obsolete as time goes by. Thus, in the following paper, we study the depreciation processes of the human capital of workers performing different types of tasks with different skill requirements over a period of more than twenty years. We argue that two types of tasks must be distinguished: knowledge-based tasks and experience-based tasks. Knowledge-based tasks demand skills depending on the actual stock of technological knowledge in a society whereas experience-based tasks demand skills depending on personal factors and individual experience values. We show, by applying Mincer regressions on four different cross sections, that the human capital of people performing knowledge-based tasks suffers more from depreciation than the human capital of individuals performing experiencebased tasks.

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More on the estimation of the human capital depreciation rate

Cited by 44 publications

References 9 publications

Demographic Change, Human Capital and Welfare

Demographic Change, Human Capital and Welfare

The entrepreneur’s experiential diversity and entrepreneurial performance

Skill Obsolescence, Vintage Effects and Changing Tasks

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