Wages and Ageing: Is There Evidence for the "Inverse-U Profile"?
AbstractHow individual wages change with time, and how they are expected to change as individuals grow older, is one of crucial determinants of their behaviour on the labour market including their decision to retire. The profile of individual hourly wages has for a long time been assumed to follow an "inverse-U" path, although there has been little work specifically concerning the age-wage profile and documenting it convincingly. The focus of this paper is the relationship between age and wages with special attention given to individuals close to retirement. The analysis is presented in a comparative context for Britain and Germany looking at two longitudinal datasets (BHPS and GSOEP respectively) for years 1995-2004. It stresses the importance of cohort effects and selection out of employment which seem crucial in determining the downward-sloping part of the "inverse-U" profile observed in most cross-sections. There seems to be little evidence that wages fall with age.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 724.
Length: 28 p.
Date of creation: 2007
Date of revision:
Wage dynamics; ageing; selection;
Other versions of this item:
- Michał Myck, 2010. "Wages and Ageing: Is There Evidence for the 'Inverse-U' Profile?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(3), pages 282-306, 06.
- Myck, Michal, 2007. "Wages and Ageing: Is There Evidence for the "Inverse-U" Profile?," IZA Discussion Papers 2983, Institute for the Study of Labor (IZA).
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
This paper has been announced in the following NEP Reports:
- NEP-AGE-2007-10-06 (Economics of Ageing)
- NEP-ALL-2007-10-06 (All new papers)
- NEP-LAB-2007-10-06 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Blundell & Howard Reed & Thomas M. Stoker, 2003. "Interpreting Aggregate Wage Growth: The Role of Labor Market Participation," American Economic Review, American Economic Association, vol. 93(4), pages 1114-1131, September.
- Haan, Peter & Steiner, Viktor, 2006.
"Making Work Pay for the Elderly Unemployed: Evaluating Alternative Policy Reforms for Germany,"
IZA Discussion Papers
2424, Institute for the Study of Labor (IZA).
- Peter Haan & Viktor Steiner, 2008. "Making Work Pay for the Elderly Unemployed - Evaluating Alternative Policy Reforms for Germany," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(3), pages 380-402, September.
- Peter Haan & Viktor Steiner, 2006. "Making Work Pay for the Elderly Unemployed: Evaluating Alternative Policy Reforms for Germany," Discussion Papers of DIW Berlin 641, DIW Berlin, German Institute for Economic Research.
- Greene, William H, 1981. "Sample Selection Bias as a Specification Error: Comment," Econometrica, Econometric Society, vol. 49(3), pages 795-98, May.
- Boockmann, Bernhard & Steiner, Viktor, 2000.
"Cohort effects and the returns to education in West Germany,"
ZEW Discussion Papers
00-05, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Bernhard Boockmann & Viktor Steiner, 2006. "Cohort effects and the returns to education in West Germany," Applied Economics, Taylor and Francis Journals, vol. 38(10), pages 1135-1152.
- James Banks, 2006. "Economic capabilities, choices and outcomes at older ages," Fiscal Studies, Institute for Fiscal Studies, vol. 27(3), pages 281-311, August.
- Richard Blundell & Alan Duncan, 1998. "Kernel Regression in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 62-87.
- V. Vandenberghe, 2011.
"Boosting the Employment Rate of Older Men and Women,"
Springer, vol. 159(2), pages 159-191, June.
- Vincent VANDENBERGHE, 2011. "Boosting the employment rate of older men and women," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Christian Dudel, 2009. "The Demographic Dilemma: Fertility, Female Labor Force Participation and Future Growth in Germany 2007-2060," SOEPpapers on Multidisciplinary Panel Data Research 158, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Mikk Medijainen, 2010. "Generational Accounting As A Tool To Evaluate The Fiscal Sustainability Of Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 74, Faculty of Economics and Business Administration, University of Tartu (Estonia).
- Carsten Schröder, 2012. "The sensitivity of distributional measures to the reference period of income," Kiel Working Papers 1777, Kiel Institute for the World Economy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.