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American Economic Journal: Microeconomics: Vol. 3 No. 3 (August 2011)

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On the Determinants of Organizational Forgetting

Article Citation

David, Guy, and Tanguy Brachet. 2011. "On the Determinants of Organizational Forgetting." American Economic Journal: Microeconomics, 3(3): 100-123.

DOI: 10.1257/mic.3.3.100

Abstract

Studies of organizational learning and forgetting identify potential channels through which the firm's production experience is lost. These channels have differing implications for efficient resource allocation within the firm, but their relative importance has been ignored to date. We develop a framework for distinguishing the contributions of labor turnover and human capital depreciation to organizational forgetting. We apply our framework to a novel dataset of ambulance companies and their workforce. We find evidence of organizational forgetting, which results from skill decay and turnover effects. The latter has twice the magnitude of the former. (JEL D23, D83, J24, J63)

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Authors

David, Guy (U PA)
Brachet, Tanguy (Charles River Associates, Washington, DC)

JEL Classifications

D23: Organizational Behavior; Transaction Costs; Property Rights
D83: Search; Learning; Information and Knowledge; Communication; Belief
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
J63: Labor Turnover; Vacancies; Layoffs

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American Economic Journal: Microeconomics


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