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Human Capital and Earnings Distribution Dynamics

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Author Info
Mark Hugget
Gustavo Ventura
Amir Yaron

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Abstract

Mean earnings and measures of earnings dispersion and skewness all increase in US data over most of the working life-cycle for a typical cohort as the cohort ages. We show that a benchmark human capital model can replicate these properties from the right distribution of initial human capital and learning ability. These distributions have the property that learning ability must differ across agents and that learning ability and initial human capital are positively correlated.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9366.

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Date of creation: Dec 2002
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Handle: RePEc:nbr:nberwo:9366

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Find related papers by JEL classification:
D3 - Microeconomics - - Distribution
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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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.:
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Cited by:
(explanations, 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.)

  1. Juan-Carlos Cordoba, 2004. "Debt-Constraints or Incomplete Markets? A Decomposition of the Wealth and Consumption Inequality in the U.S," Macroeconomics 0404004, EconWPA. [Downloadable!]
    Other versions:
  2. Johanna Francis, 2008. "Wealth and the Capitalist Spirit," Fordham Economics Discussion Paper Series dp2008-10, Fordham University, Department of Economics. [Downloadable!]
    Other versions:
  3. Sommer, Mathias, 2008. "Understanding the trends in income, consumption and wealth inequality and how important are life-cycle effects?," Sonderforschungsbereich 504 Publications 08-12, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
  4. Mark Huggett & Gustavo Ventura & Amir Yaron, 2007. "Sources of Lifetime Inequality," Working Papers gueconwpa~07-07-04, Georgetown University, Department of Economics. [Downloadable!]
    Other versions:
  5. Marco Cagetti & Mariacristina De Nardi, 2006. "Wealth Inequality: Data and Models," NBER Working Papers 12550, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Andrés Erosa & Luisa Fuster & Diego Restuccia, 2005. "A Quantitative Theory of the Gender Gap in Wages," Working Papers tecipa-199, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  7. Amir Yaron, 2007. "The Research Agenda: Amir Yaron on Lifetime Inequality and Long Run Risks and Asset Pricing," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 9(1), November. [Downloadable!]
  8. Heathcote, Jonathan & Storesletten, Kjetil & Violante, Giovanni L, 2005. "Insurance and Opportunities: The Welfare Implications of Rising Wage Dispersion," CEPR Discussion Papers 5200, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. Camilo Mondragón-Vélez, 2009. "The probability of transition to entrepreneurship revisited: wealth, education and age," Annals of Finance, Springer, vol. 5(3), pages 421-441, June. [Downloadable!] (restricted)
  10. Audra J. Bowlus & Chris Robinson, 2008. "Human Capital Prices, Productivity and Growth," University of Western Ontario, CIBC Human Capital and Productivity Project Working Papers 20085, University of Western Ontario, CIBC Human Capital and Productivity Project. [Downloadable!]
  11. Marla, Ripoll & Juan, Cordoba, 2006. "The Role of Education in Development," MPRA Paper 1864, University Library of Munich, Germany, revised Feb 2007. [Downloadable!]
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  12. Burhanettin Kuruscu, 2006. "Training and Lifetime Income," American Economic Review, American Economic Association, vol. 96(3), pages 832-846, June. [Downloadable!]
  13. Seung Mo Choi, 2008. "How Large are Learning Externalities? Measurement by Calibration," Working Papers 2008-26, School of Economic Sciences, Washington State University. [Downloadable!]
  14. Fatih Guvenen & Burhanettin Kuruscu, 2007. "A Quantitative Analysis of the Evolution of the U.S. Wage Distribution: 1970-2000," NBER Working Papers 13095, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Gilles Le Garrec, 2005. "Social security, inequality and growth," Documents de Travail de l'OFCE 2005-22, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  16. Mathias Sommer, 2008. "Understanding the trends in income, consumption and wealth inequality and how important are life-cycle effects?," MEA discussion paper series 08160, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  17. Kredler, Matthias, 2008. "Experience vs. Obsolescence: A Vintage-Human-Capital Model," MPRA Paper 10200, University Library of Munich, Germany. [Downloadable!]
  18. Gregory Gilpin & Michael Kaganovich, 2009. "The Quantity and Quality of Teachers: A Dynamic Trade-off," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  19. Heathcote, Jonathan & Storesletten, Kjetil & Violante, Giovanni L, 2007. "Consumption and Labour Supply with Partial Insurance: An Analytical Framework," CEPR Discussion Papers 6280, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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