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Technological Change and the Age-Earnings Profile: Evidence from the International Merchant Marine, 1861-1912

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  • Peter Thompson

    (Carnegie Mellon University)

Abstract

Models of vintage-specific learning predict systematic cross-technology differences in earnings among otherwise identical employees. This paper outlines a vintage learning model based on Chari and Hopenhayn's (1991, Journal of Political Economy) exposition. The model predicts that (i) the age-earnings profile is steeper in new technologies, (ii) the discounted present value of lifetime earnings are equalized across technologies, and (iii) the age-earnings profile in newer technologies becomes flatter over time. These predictions find support from a data set spanning a 52 year period beginning in 1861 that matches over 141,000 wage contracts accepted by merchant mariners to the technologies with which they worked. As a by-product, the paper reports some of the oldest evidence yet made available of the returns to literacy. (Copyright: Elsevier)

Suggested Citation

  • Peter Thompson, 2003. "Technological Change and the Age-Earnings Profile: Evidence from the International Merchant Marine, 1861-1912," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(3), pages 578-601, July.
  • Handle: RePEc:red:issued:v:6:y:2003:i:3:p:578-601
    DOI: 10.1016/S1094-2025(03)00014-0
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    References listed on IDEAS

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    Cited by:

    1. Ojala, Jari & Pehkonen, Jaakko & Eloranta, Jari, 2016. "Deskilling and decline in skill premium during the age of sail: Swedish and Finnish seamen, 1751–1913," Explorations in Economic History, Elsevier, vol. 61(C), pages 85-94.

    More about this item

    Keywords

    technology diffusion; vintage human capital; age-earnings profile; literacy;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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