Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5099568 | Journal of Economic Dynamics and Control | 2007 | 37 Pages |
Abstract
To study the optimal age-specific labor demand and human capital investment at the firm level we extend the standard dynamic labor demand model by introducing 'age' as a second dynamic variable and distinguish between two types of workers: 'low skilled' and 'high skilled'. Applying an age-structured optimal control model we derive qualitative features of the optimal age-specific hiring and training effort. For the case of a linear revenue and production function we prove that firms do not anticipate changes in adjustment costs in their optimal decisions. This result no longer holds if a nonlinear revenue or production function is considered.
Keywords
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Alexia Prskawetz, Vladimir M. Veliov,