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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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    File URL: http://www.sciencedirect.com/science/article/pii/S0165188914000128
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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. Boucekkine, Raouf & del Rio, Fernando & Licandro, Omar, 1999. "Endogenous vs Exogenously Driven Fluctuations in Vintage Capital Models," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1999007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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    6. Barucci, Emilio & Gozzi, Fausto, 1998. "Investment in a vintage capital model," Research in Economics, Elsevier, vol. 52(2), pages 159-188, June.
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    12. BOUCEKKINE, Raouf & DEL RIO, Fernando & LICANDRO, Omar, . "Embodied technological change, learning-by-doint and the productivity slowdown," CORE Discussion Papers RP 1629, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    17. Feichtinger, Gustav & Hartl, Richard F. & Kort, Peter M. & Veliov, Vladimir M., 2008. "Financially constrained capital investments: The effects of disembodied and embodied technological progress," Journal of Mathematical Economics, Elsevier, vol. 44(5-6), pages 459-483, April.
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    25. van Hilten, Onno, 1991. "The optimal lifetime of capital equipment," Journal of Economic Theory, Elsevier, vol. 55(2), pages 449-454, December.
    26. Jess Benhabib & Aldo Rustichini, 1990. "Vintage Capital, Investment and Growth," Discussion Papers 886, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    27. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
    28. Thompson, Peter, 2010. "Learning by Doing," Handbook of the Economics of Innovation, Elsevier.
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    30. 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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