انحصار، انباشت سرمایه انسانی و توسعه
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Development Economics, Volume 61, Issue 1, February 2000, Pages 137–174
Monopoly is an important barrier to development for it restricts the mobility of workers. This gives rise to specificity problem and consequently weakens workers' incentives to invest in human capital. In a two-sector general equilibrium model calibrated to the facts about the labor market, I find that in the long run, GDP can rise by about 2.6 times if these distortions are removed even if the monopoly markup and the degree of specificity are set at modest levels.
Citing Adam Smith and Alfred Marshall, Parente and Prescott (1997) remind us that classical economists took a very strong position against monopoly and considered it a powerful drag on economic progress. But since the celebrated study of Harberger (1954) and the literature that followed which established that the allocative inefficiency from non-marginal cost pricing may reduce GDP, at most, by a few percentage points, this view has not commanded much prominence in contemporary economics. The point of departure in this paper is that monopoly distortions do not fall on product markets alone. Under the premise that many skills are industry-specific, entry barriers in the product market would effectively turn the labor market of the industry into a monopsony in which workers are paid less than their marginal products. This gives rise to a classic holdup problem in human capital investment. The purpose of the paper is to make a quantitative assessment of the resulting distortions in a dynamic general equilibrium model. That workers suffer large wage declines when they switch industries (Neal, 1995) is very good evidence that human capital is, to a very important extent, industry-specific. While the literature on specific human capital has focused mostly on firm-specific skills,1 the specificity of skills may lie mostly in industry-specific skills, instead. Undoubtedly, in many professions, skills acquired in one firm are highly valued by firms in the same line of business. The strongest piece of evidence can again be found in Neal. He reports that the return to job tenure accumulated in a worker's previous jobs is about the same magnitude as the return to tenure in the worker's current job, for workers who did not switch industry. This suggests that skills can be transferred across firms in the same line of business largely intact and the specificity of skills is a problem only when workers's mobility across firms in the same industry is restricted. In this paper, I study a two-sector general equilibrium model in which production in the two sectors differs in human capital intensities. There is a competitive traditional sector in which production is less human-capital-intensive and an industrial sector in which it is more so. Skills in the industrial sector are specific to a particular industry in the sector. When there are entry barriers to the industries in the industrial sector, workers are denied mobility within the industry in which they are skilled, and consequently will only get paid their outside options which are what they may earn in the traditional sector. The assumption, that production in the traditional sector is less human-capital-intensive, implies that under the monopoly industrial organization, wages in the industrial sector rise less rapidly than the marginal product of skills, which would eventually attenuate workers' incentives to invest in human capital. The model is calibrated to the facts about the US labor market to make a quantitative assessment of the effects of labor specificity. I find that the specificity problem results in a substantial reduction in human capital investment and GDP even when the parameter governing the degree of specificity is set at a modest level compared to what the data in the labor market suggest. There is an income differential of 2.6 times between the economy with a monopolistic industrial sector and a competitive benchmark that is free of any specificity problems. The big effects that I find are due, in large part, to the assumed human and physical capital complementarity. There is only much to gain from investing in physical capital if the workforce is well-educated and well-trained, to begin with. Hence, the distortions from the monopoly-induced labor specificity weakens the incentive to invest in physical capital, too. As a result, a modest degree of specificity can deliver big effects in general equilibrium. The analysis is then extended to: (1) including union–firm bargaining (UFB) in the monopoly economy as an additional source of distortion, and (2) allowing firms to invest in workers' training. In the basic model, the monopoly rental is assumed to accrue entirely to the monopolist producer of the industry. With UFB, part of the rent is retained by the union which will then distribute it back to the workers. This has the effect of improving the incentives in human capital investment as workers stand to take a share in the quasi-rent once they attain the minimum qualification for employment in the industrial sector. On the other hand, this is an environment in which firms also suffer from the holdup problem which has the effect of lowering physical capital investment. Consequently, there is a trade-off between the incentives to invest in physical and human capital given that human capital suffers from the specificity problem to begin with. In a distorted labor market, firms stand to gain by investing in workers' training. This suggests the possibility that most of the distortions identified in the baseline model may be the artifacts of the restrictive assumption that only workers themselves may invest in their own training. My analysis indicates that this is not quite true. The reason is that firms may only have much to gain from investing in training when the labor market is severely distorted, not when it is only moderately distorted. But in a severely distorted labor market, the incentive to invest in schooling is also minimal. Given that there exists complementarity between schooling and training investment, firms will not invest much in training either. The idea in this paper is not new. The effect of factor specificity in macroeconomics is extensively studied in Caballero and Hammour, 1996a, Caballero and Hammour, 1996b and Caballero and Hammour, 1997. The primary contribution of the paper is the quantitatively assessment of the distortions from calibrating the model to the facts about the labor market. The secondary contributions include an analysis of an environment where simultaneously there are holdup problems for both human and physical capital. Assessing the quantitative effects of monopoly distortions has a long tradition, starting with the classic study by Harberger (1954) that focuses on the static allocative effect of monopoly pricing. A different strand of analysis is due to Laitner (1982), who argues in the context of an overlapping generation model that the rights to monopoly rentals will compete with investment in physical capital for young agents' savings, lowering the steady state capital stock and income as a result. The quantitative effect is more significant than those found in the Harberger-type analyses, but still modest at about 3.2% of GDP. A more up-to-date analysis of the relationship between market structure and aggregate output can be found in Aghion and Howitt (1998) (Chap. 7). They modify the standard product innovation growth model to analyze the conditions under which product market competition may be pro-innovation. Closest to this paper is Parente and Prescott (1997), who argue that workers possessing vested interests in existing and less efficient technologies will form coalitions to block the introduction of more productive technologies, the introduction of which will wipe out their monopoly rentals. They find that this can result in an income differential of three times between a free enterprise and a monopoly economy.2 This paper is also related to the literature on barriers to economic development, which includes Parente and Prescott (1994), Romer (1994), Chari et al. (1996) and Rodriguez-Clare (1996), among others. These papers study the effects of investment distortions on long-run income. The investment distortion considered is usually taken to be a bundle of policies that together reduce the return to investment. This paper analyzes in more microeconomics details one such policy.3 The organization of the paper is as follows. Section 2presents the basic model. The comparison of the benchmark competitive economy and the monopoly economy, assuming that all factors of production are in fixed supply, follows in Section 3. Section 4introduces human and physical investment in the analysis. Section 5examines the magnitudes of the distortions predicted by the model with investment. Section 6extends the model to studying UFB and firms' investment in training. Section 7concludes.
نتیجه گیری انگلیسی
The analysis in this paper is about comparing long-run income under different industrial structures. The true gains from removing the distortions can be somewhat smaller than the analysis indicates because in the transition from the low investment to the high investment equilibrium, consumption is lowered early in the transition. Nevertheless, this consideration does not affect the conclusion that the distortions can lead to large effects in long-run income. While factor accumulation, in general, and human capital investment, in particular, are most likely not the most important factors for the huge cross-country income differential that we observe, they are nevertheless important factors. Understanding what gives rise to the not insignificant difference in training and schooling investment across countries remains an important task. In this paper, I argue that entry barriers are detrimental to development mostly because they foster factor specificity and consequently weaken investment incentives. The experiments in the paper show that the magnitudes of these distortions can be very large. The policy implications is straightforward. Entry barriers can result in very costly distortions in factor markets. Promoting a free enterprise system is a big boost to economic development.