Abstract

The interactions between the creation of specific human capital (through learning by doing activities) and the distruction (through the obsolescence of skills and know-how) of the same quality of human capital, induced by technological and organizational change is modelled in the paper, via a dynamical non linear system of equations. If one further assume the existence of a direct relation between human capital, productivity and employment, then the model can explain some feature of the European long-term unemployment, namely: persistence and hysteresis. The paper analyses also the combined effect of different ways of human capital creation and different rates of technological and organizational change.