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Vol. 70, No. 4, pp. 312-330 (2019)

“Firm Specificity of Human Capital: Process of its Endogenous Determination”
Hodaka Morita (Institute of Economic Research, Hitotsubashi University), Cheng-Tao Tang (Graduate School of International Relations, International University of Japan), Shosuke Noguchi (Graduate Student of Hitotsubashi University Business School), Kunpei Akiyama (Graduate Student of Economics, Hitotsubashi University)

In the economic analyses of human capital acquisition within firms, an important distinction has been made between general and firm specific human capital. In this paper we focus on the degree of firm specificity of human capital as a concept that synthesizes general, industry-specific, and firm-specific human capital. To this end, we propose and analyze a model that endogenously determines the degree of firm specificity of human capital as an extension of Morita and Tang’s (2019) model that endogenously determines firm specificity of asset. We then explore our model’s implications on U.S.-Japanese comparison of employment practices.