Productivity Adjustments and Learning-by-Doing as Human Capital

CES Bureau of the Census WP 97-17

37 Pages Posted: 5 Jan 1998

See all articles by James E. Bessen

James E. Bessen

Technology & Policy Research Initiative, BU School of Law

Date Written: November 1997

Abstract

This paper measures plant-level productivity gains associated with learning curves across the entire manufacturing sector. We measure these gains at plant startups and also after major employment changes. We find: 1) The gains are strongly associated with a variety of human capital measures implying that learning-by-doing is largely a firm-specific human capital investment. 2) This implicit investment is large; many plants invest as much in learning-by-doing as they invest in physical capital and much more than they invest in formal job training. 3) This investment differs persistently over industries and is higher with greater R&D. 4) Consistent with a learning-by-doing interpretation, the human capital investment is much larger following employment decreases than increases. We conclude that learning-by-doing is a major factor in wage determination, technical progress and asymmetric employment adjustment costs.

JEL Classification: J24, E23, O30

Suggested Citation

Bessen, James E., Productivity Adjustments and Learning-by-Doing as Human Capital (November 1997). CES Bureau of the Census WP 97-17, Available at SSRN: https://ssrn.com/abstract=48645 or http://dx.doi.org/10.2139/ssrn.48645

James E. Bessen (Contact Author)

Technology & Policy Research Initiative, BU School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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