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Revisiting wage, earnings, and hours profiles

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  • Rupert, Peter
  • Zanella, Giulio

Abstract

For the youngest cohorts whose entire working life can be observed, hours start falling much earlier than wages. Wages do not fall (if they fall at all) until one׳s late 60s. The data suggest that many workers start a smooth transition into retirement by working progressively fewer hours while still facing an upward-sloping wage profile. This pattern is not an artifact of staggered abrupt retirement or selection. This evidence imposes restrictions on dynamic models of the aggregate economy, and provide updated numerical profiles that can be readily used in quantitative macroeconomic analysis to incorporate this new pattern into aggregate models.

Suggested Citation

  • Rupert, Peter & Zanella, Giulio, 2015. "Revisiting wage, earnings, and hours profiles," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 114-130.
  • Handle: RePEc:eee:moneco:v:72:y:2015:i:c:p:114-130
    DOI: 10.1016/j.jmoneco.2015.02.001
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    More about this item

    Keywords

    Life cycle; Wage profile; Labor supply; Human capital; Pre-retirement;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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