Search, Matching and Training

In this paper we estimate a model of general and human capital investment within a partial equilibrium model of search. The estimated model enables us to determine the production technology for both types of human capital and to assess their value in the sense of productivity and welfare of firms and workers. In particular, we are able to determine the impact of primitive labor market parameters on the incentives to invest in both types of capital. We use the NLSY97 to estimate the model.