This study analyzes how the intensive use of firm specific human capital in firms affects the unemployment rate. For this purpose, I introduce into an equilibrium search model the possibility that workers quit their jobs. A worker changes his job when a firm that newly enters into the market offers a higher wage than his current wage. If firm specific human capital is important, it is difficult for a worker to quit his job, and, in consequence, the number of workers who quit their jobs is small. Thus, the unemployment rate is low. If the speed of technology obsolescence is high, the unemployment rate is high.
- Firm specific human capital
- Technology obsolescence
ASJC Scopus subject areas
- Economics and Econometrics
- Political Science and International Relations