Knowledge Accumulation Within an Organization
Abstract: In this paper, we consider a knowledge accumulation problem within an organization. We depart from the human capital theory initiated by Becker (1962, 1964) and consider an organization that cannot prevent the worker from quitting and using the knowledge outside the organization. We study how the employer optimally distorts the knowledge accumulation path and chooses a wage pro le in order to mitigate the opportunism problem. We show that knowledge accumulation is delayed: the fraction of working time allocated to knowledge creation is highest at the early career stage, falls gradually, then rises again, before falling fi nally toward zero. We determine the effect of a change in the severity of the enforcement problem (or the speci city of knowledge). We also discuss the form of the optimal life-cycle earning pro les, the role of the initial knowledge level and the role of discounting.
