Das Human-Kapital: Emerging Patterns in the Class Structure

Project: Dissertation

Research areas and keywords

UKÄ subject classification

  • Economics

Keywords

  • Endogenous growth, Human Capital Accumulation under Obsolescence and Accumulation, Automation, Ambiguity Aversion, Inequality

Description

Labor market skills can depreciate in usefulness and relevance very suddenly, for instance through introduction of new technologies or off-shoring of production -- a process referred to as human capital obsolescence. Recently developed task-based frameworks have proven adept at capturing such labor-displacing dynamics alongside the canonical factor-augmenting changes in technology. Nevertheless, none of these models incorporate decisions on human capital investment. Hence, the labor immiseration scenarios predicted so far run contrary to the empirics on the effects of automation. In this study, I remedy this by including considerations of human capital investment based on the conceptual framework of the psychometric literature on skill formation. Moreover, focus of the study is shifted towards institutional adoption of new technologies, rather than their arrival rate. In doing so, the model produces a labor immiseration scenario consistent with around a dozen pivotal empirical findings on returns to education and consequences of automation while solving several puzzles in the literature. The main mechanism for many of these empirics is shown to be the faster accumulation rate of physical vis-à-vis human capital. Other contributions of this study are providing a richer alternative to the Roy model of occupational choice and earnings inequality in the empirical labor literature and a unification of the task-based framework with the third generation of distributional models in macroeconomics fused with decisions on human capital investment.

I also construct a smooth ambiguity model embedded in a task-based framework. In this project I explore additionally the role of ambiguity on human capital investments. Results show that higher optimism with regards to human capital obsolescence of incumbent skill leads to correspondingly more specialization indicating a potential wedge between skills of the workforce and future tasks. On the other hand, ambiguity aversion leads to less human capital investment in light of risk for skill obsolescence. Furthermore, fixed job description decouples learning and labor decisions from everything other than efficiency in learning. Skill diversification is shown to be a consequence of risk in human capital obsolescence. Without any such risk, the agent specializes in the skill with the highest marginal return to labor.
StatusActive
Effective start/end date2016/09/012021/05/31

Participants