This paper presents an analytical model of labor specialization. Workers make human capital investment decisions on the depth and the breadth of their skill. Given that firms have diverse job requirements and increasing returns to scale, workers invest more for the depth of their human capital,...

We analyze the effects of various policies to reduce rent seeking in the controlled market in which buyers have heterogeneous valuation regarding the coveted good. The good is allocated according to the buyer-specific signal ('test score'), which is determined by the quantity of wasteful 'rent...

Since the financial crisis in 1998, many Korean corporations with low profitability and excessive liabilities cut operating costs. They had to deal with exorbitant wage increases that outpaced productivity and were generated by the traditional seniority-based wage system. The empirical analysis...