Human Capital Accumulation and the Intertemporal Elasticity of Substitution of Labor: How Large is the Bias?

I consider two different skill accumulation technologies, learning by doing and Ben-Porath type training. The effect of human capital accumulation in the form of learning by doing is to increase the labor supply elasticity estimate by a factor of 2.1 relative to the estimate that ignores human capital accumulation. The results are similar for the Ben Porath type training technology, although the estimate of the bias is somewhat higher. (Copyright: Elsevier)