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Experience vs. Obsolescence: A Vintage-Human-Capital Model

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  • Matthias Kredler

    (Universidad Carlos III Madrid)

Abstract

horizon version of Chari & Hopenhayn’s (1991) vintage-human-capital model. Different skill levels inside a vintage are complementary in production. I establish equivalence between competitive equilibrium and a planner’s problem, which ensures uniqueness of equilibrium. Returns to skill and tenure premia are highest in young vintages, where skill is scarcest and agents accumulate human capital fastest. As the vintage ages, the skill premium decreases and vanishes entirely upon vintage death. The results are in line with German linked employer-employee data: Young establishments pay higher tenure premia but lower mean wages than old establishments.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 369.

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Date of creation: 2010
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Handle: RePEc:red:sed010:369

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  1. Fatih Guvenen & Burhanettin Kuruscu, 2010. "A Quantitative Analysis of the Evolution of the U.S. Wage Distribution, 1970-2000," NBER Chapters, in: NBER Macroeconomics Annual 2009, Volume 24, pages 227-276 National Bureau of Economic Research, Inc.
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Cited by:
  1. Giovanni Mastrobuoni & Filippo Taddei, 2011. "Age Before Beauty? Productivity and Work vs. Seniority and Early Retirement," CeRP Working Papers 120, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  2. Boyan Jovanovic, 2009. "When should firms invest in old capital?," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(1), pages 107-123.

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