TY  - JOUR
AU  - Jovanovic,Boyan
AU  - Nyarko,Yaw
TI  - The Transfer of Human Capital
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4823
PY  - 1994
Y2  - August 1994
UR  - http://www.nber.org/papers/w4823
L1  - http://www.nber.org/papers/w4823.pdf
N1  - Author contact info:
Boyan Jovanovic
New York University
Department of Economics
19 W. 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8953
Fax: 212/995-4186
E-Mail: Boyan.Jovanovic@nyu.edu

Yaw Nyarko
Department of Economics
New York University
19 W. 4th Street, 6th Floor
New York, NY 10012
Tel: 212-998-8928;  yaw.nyarko@nyu.edu
E-Mail: yaw.nyarko@nyu.edu
AB  - Most of our productive knowledge was handed down to us by previous generations.  The transfer of knowledge from the old to the young is therefore a cornerstone of productivity growth.  We study this process in a model in which the old sell knowledge to the young - - old workers train the young, and charge them for this service.  We take an information-theoretic approach in which training occurs if a young agent watches an old worker perform a task.  This assumption has plenty of empirical support -- in their first three months on the job, young workers spend about five times as long watching others work as they do in formal training programs. Equilibrium is not constrained Pareto optimal.  The old have private information, and this gives rise to an adverse selection problem: some old agents manage to sell skills that the young would not buy (if only they knew exactly what they were buying).  We derive the implications for the lifetime of technological lines, and we show that the model generates a negative relation between a firm's productivity and its probability of failure.
ER  -