TY  - RPRT
        AU  - Bobba, Matteo
AU  - Flabbi, Luca
AU  - Algazi, Santiago Levy
AU  - Tejada, Mauricio
        TI  - Labor Market Search, Informality, and On-The-Job Human Capital Accumulation
        PY  - 2019/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 12091
        UR  - https://www.iza.org/publications/dp12091
        AB  - We develop a search and matching model where firms and workers produce output that depends both on match-specific productivity and on worker-specific human capital. The human capital is accumulated while working but depreciates while searching for a job. Jobs can be formal or informal and firms post the formality status. The equilibrium is characterized by an endogenous steady state distribution of human capital and by an endogenous formality rate. The model is estimated on longitudinal labor market data for Mexico. Human capital accumulation on-the-job is responsible for more than half of the overall value of production and upgrades more quickly while working formally than informally. Policy experiments reveal that the dynamics of human capital accumulation magnifies the negative impact on productivity of the labor market institutions that give raise to informality.
        KW  - informality
KW  - Nash bargaining
KW  - search and matching
KW  - labor market frictions
KW  - on-the-job human capital accumulation
        ER  -