Human Capital Over the Life Cycle

Human Capital Over the Life Cycle

A European Perspective

Edited by Catherine Sofer

Human Capital Over the Life Cycle synthesises comparative research on the processes of human capital formation in the areas of education and training in Europe, in relation to the labour market. The book proposes that one of the most important challenges faced by Europe today is to understand the link between education and training on the one hand and economic and social inequality on the other. The authors focus the analysis on three main aspects of the links between education and social inequality: educational inequality, differences in access to labour markets and differences in lifelong earnings and training.

Chapter 9: Education, gender and labour mobility

Kjell G. Salvanes

Subjects: economics and finance, economics of education, labour economics, education, economics of education


Kjell G. Salvanes1 1. INTRODUCTION Labour markets are in constant flux. Plants expand, contract and replace workers who quit or get fired. Many of the recent insights on the massive gross flows in the labour market stem from the recent literature on gross job flows (hiring due to expansion of plants and plant entry and firing due to a decline in incumbents and plant exit) and worker flows above job changes (churning or replacement of workers for a given number of jobs).2 However, very little is known about what is behind the extensive aggregate flows, and the heterogeneity in employment practices is a particularly ill-treated issue. For instance, when both a high degree of hires and separations are observed at the same time, it could be due to hires of highly educated workers and fires of loweducated workers, hires of young workers and fires of old workers and so on, and not at all to churning of homogeneous workers. When assuming homogeneous workers, which is done in most of this literature, it is impossible to distinguish between these two types of employment policies.3 Another observation emerging from this literature is that there is a large degree of plantspecific heterogeneity in turnover patterns in that expanding plants also fire workers and plants reducing employment also hire new workers to a large degree. Thus, whether the job flows and churning are two distinct processes or used interchangeably by firms, is also an open question. In this chapter we first present the...

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