Which of the following is a distinction between general and specific human capital?
A)General human capital consists of training and education that is valued by different firms,whereas specific human capital is more valuable to the current employer.
B)General human capital enables workers to earn compensating wage differentials,whereas workers with specific human capital earn the competitive wage rate.
C)General human capital leads to higher labor costs,whereas specific human capital leads to higher turnover costs.
D)General human capital leads to self-selection on the basis of risk preference,whereas specific human capital leads to the adverse selection problem.

Question

Quizplus · Accepted Answer

General human capital refers to skills and knowledge that are useful across different firms and industries, while specific human capital is highly specialized and valuable only to the current employer. Therefore, option A accurately distinguishes between the two types of human capital. Option B is incorrect as both types of human capital may enable workers to earn higher wages. Option C is incorrect as higher labor costs are associated with specific human capital due to its scarcity and specialization. Option D is incorrect as self-selection and adverse selection problems are not linked to the type of human capital, but rather market conditions and information asymmetry.

Which of the Following Is a Distinction Between General and Specific