Template-type: ReDIF-Paper 1.0
Author-Name: Thomas Bolli
Author-Name-First: Thomas
Author-Name-Last: Bolli
Author-Name: Mathias Zurlinden
Author-Name-First: Mathias
Author-Name-Last: Zurlinden
Title: Measurement of labor quality growth caused by unobservable characteristics
Abstract: The standard economy-wide indices of labor quality (or human capital) largely ignore the role of unobservable worker characteristics. In this paper, we develop a methodology for identifying the contributions of both observable and unobservable worker characteristics in the presence of the incidental parameter problem. Based on data for Switzerland over the period 1991-2006, we find that a large part of growth in labor quality is caused by shifts in the distribution of unobservable worker characteristics. The overall index differs little from the standard indices, but contributions to growth attributed to education and age are corrected downwards.
Length: 22 pages
Creation-Date: 2009
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2009/working_paper_2009_01
File-Format: text/html
Number: 2009-01
Classification-JEL: J24, J31
Keywords: human capital, labor quality
Handle: RePEc:snb:snbwpa:2009-01