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

  • Peter Thompson

    (Carnegie Mellon University)

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)

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File URL: http://dx.doi.org/10.1016/S1094-2025(03)00014-0
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 6 (2003)
Issue (Month): 3 (July)
Pages: 578-601

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Handle: RePEc:red:issued:v:6:y:2003:i:3:p:578-601
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  1. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602 Elsevier.
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  5. Goldin, Claudia & Katz, Lawrence, 2000. "Education and Income in the Early 20th Century: Evidence from the Prairies," Scholarly Articles 2624456, Harvard University Department of Economics.
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  7. Jacob Mincer, 1988. "Job Training, Wage Growth, and Labor Turnover," NBER Working Papers 2690, National Bureau of Economic Research, Inc.
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  10. Richard Rogerson, 2005. "Sectoral Shocks, Specific Human Capital and Displaced Workers," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(1), pages 89-105, January.
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  12. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
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  18. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
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  23. Grubb, Farley, 1985. "The Market for Indentured Immigrants: Evidence on the Efficiency of Forward-Labor Contracting in Philadelphia, 1745–1773," The Journal of Economic History, Cambridge University Press, vol. 45(04), pages 855-868, December.
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