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Vintage human capital and learning curves

  • Kredler, Matthias
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    I study a vintage-human-capital model in which long-lived workers accumulate human capital following an exogenous learning curve. Different skill levels inside a vintage are complementary in production; this makes the ex ante homogeneous workers enter different vintages. The continuous-time framework allows me to study the timing decision for the technology phase-out differentially and to derive sharp characterization for wages and the distribution of workers in the dying technology. I show how to posit and solve a planner's problem and construct equilibrium in this way. Consistent with empirical evidence, I show that the experience premium is always positive but diminishes as a technology ages. The connection between workers' learning curves and the technology's progress curve is characterized.

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    Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

    Volume (Year): 40 (2014)
    Issue (Month): C ()
    Pages: 154-178

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    Handle: RePEc:eee:dyncon:v:40:y:2014:i:c:p:154-178
    Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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    1. Giovanni L. Violante, 2002. "Technological Acceleration, Skill Transferability, And The Rise In Residual Inequality," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 297-338, February.
    2. Feichtinger, Gustav & Hartl, Richard F. & Kort, Peter M. & Veliov, Vladimir M., 2006. "Capital accumulation under technological progress and learning: A vintage capital approach," European Journal of Operational Research, Elsevier, vol. 172(1), pages 293-310, July.
    3. Matthias Kredler, 2010. "Experience vs. Obsolescence: A Vintage-Human-Capital Model," 2010 Meeting Papers 369, Society for Economic Dynamics.
    4. Claudio Michelacci & Vincenzo Quadrini, 2004. "Financial Markets and Wages," 2004 Meeting Papers 116, Society for Economic Dynamics.
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    11. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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    13. Goetz, Renan-Ulrich & Hritonenko, Natali & Yatsenko, Yuri, 2008. "The optimal economic lifetime of vintage capital in the presence of operating costs, technological progress, and learning," Journal of Economic Dynamics and Control, Elsevier, vol. 32(9), pages 3032-3053, September.
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