Experience vs. obsolescence: A vintage-human-capital model
I introduce endogenous human-capital accumulation into an infinite-horizon version of Chari and Hopenhaynʼs (1991)  vintage-human-capital model. 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. Workers run through cycles of human-capital accumulation: their wages rise as they accumulate skill, undergo downward pressure as the technology ages, and finally drop sharply when the worker switches to a new technology. The results are in line with German linked employer–employee data: tenure premia are highest in young establishments, as well as in fast-growing industries, occupations and establishments. A calibration exercise suggests that human-capital accumulation is the most important determinant of workersʼ wage profiles, whereas changes to the price of skill and vintage productivity gains play a smaller quantitative role.
References listed on IDEAS
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.:
- Lars Ljungqvist & Thomas J. Sargent, 1998.
"The European Unemployment Dilemma,"
Journal of Political Economy,
University of Chicago Press, vol. 106(3), pages 514-550, June.
- Lars Ljungqvist & Thomas J. Sargent, 1996. "The European Unemployment Dilemma," EUI-RSCAS Working Papers 36, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
- Lars Ljungqvist & Thomas J. Sargent, 1995. "The European unemployment dilemma," Working Paper Series, Macroeconomic Issues 95-17, Federal Reserve Bank of Chicago.
- Ljungqvist, Lars & Sargent, Thomas J., 1997. "The European Unemployment Dilemma," SSE/EFI Working Paper Series in Economics and Finance 178, Stockholm School of Economics.
- Ljungqvist, Lars & Sargent, Thomas J., 1997. "The European Unemployment Dilemma," Working Paper Series 481, Research Institute of Industrial Economics.
- Esteban Rossi-Hansberg & Luis Garicano, 2008.
2008 Meeting Papers
247, Society for Economic Dynamics.
- Huggett, Mark & Ventura, Gustavo & Yaron, Amir, 2006.
"Human capital and earnings distribution dynamics,"
Journal of Monetary Economics,
Elsevier, vol. 53(2), pages 265-290, March.
- Mark Huggett, 2003. "Human Capital and Earnings Distribution Dynamics," Working Papers gueconwpa~03-03-10, Georgetown University, Department of Economics.
- Mark Hugget & Gustavo Ventura & Amir Yaron, 2002. "Human Capital and Earnings Distribution Dynamics," NBER Working Papers 9366, National Bureau of Economic Research, Inc.
- Andrew Atkeson & Patrick J. Kehoe, 2005.
"Modeling and measuring organization capital,"
291, Federal Reserve Bank of Minneapolis.
- Raouf, BOUCEKKINE & David, DE LA CROIX & Omar, LICANDRO, 2006.
Discussion Papers (ECON - Département des Sciences Economiques)
2006014, Université catholique de Louvain, Département des Sciences Economiques.
- Raouf Boucekkine & David de la Croix & Omar Licandro, 2006. "Vintage Capital," Economics Working Papers ECO2006/8, European University Institute.
- BOUCEKKINE, Raouf & DE LA CROIX, David & LICANDRO, Omar, 2006. "Vintage capital," CORE Discussion Papers 2006024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Parente Stephen L., 1994. "Technology Adoption, Learning-by-Doing, and Economic Growth," Journal of Economic Theory, Elsevier, vol. 63(2), pages 346-369, August.
- Claudio Michelacci & Vincenzo Quadrini, 2004.
"Financial Markets and Wages,"
2004 Meeting Papers
116, Society for Economic Dynamics.
- Fatih Guvenen & Burhanettin Kuruscu, 2010.
"A Quantitative Analysis of the Evolution of the U.S. Wage Distribution, 1970-2000,"
in: NBER Macroeconomics Annual 2009, Volume 24, pages 227-276
National Bureau of Economic Research, Inc.
- Fatih Guvenen & Burhanettin Kuruscu, 2009. "A quantitative analysis of the evolution of the U.S. wage distribution, 1970-2000," Staff Report 427, Federal Reserve Bank of Minneapolis.
- 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.
- Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-65, December.
- Ken Burdett & Melvyn Coles, 2003. "Equilibrium Wage-Tenure Contracts," Econometrica, Econometric Society, vol. 71(5), pages 1377-1404, 09.
- Giovanni L. Violante, 2002. "Technological Acceleration, Skill Transferability, and the Rise in Residual Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 297-338.
- Prescott, Edward C & Boyd, John H, 1987. "Dynamic Coalitions: Engines of Growth," American Economic Review, American Economic Association, vol. 77(2), pages 63-67, May.
- Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1, September.
- repec:ucp:bknber:9780226304557 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:150:y:2014:i:c:p:709-739. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.