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Modelling the average income dependence on work experience in the USA from 1967 to 2002

Author

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  • Ivan O. Kitov

    (Russian Academy of Sciences)

Abstract

The average and median income dependence on work experience and time is analyzed and modelled for the USA. The original data set providing the mean and median income estimates in 10 year long intervals spans a long time period of almost 35 years – from 1967 to 2003. A microeconomic model linking personal income, population age structure and GDP per capita is used to predict the mean income values in various age groups and their relative evolution in time. Also modelled is the value of work experience where the mean income growth ends and it starts to drop exponentially with increasing age. This work experience increases through time as the square root of the per capita GDP growth. Prediction for the following 20 years is given for each age group considering potential per capita growth rate of 1.6%. The USA mean income dependence on work experience for 1987 coincides with that for 2002 in the UK – the years when per capita GDP were equal in the countries.

Suggested Citation

  • Ivan O. Kitov, 2005. "Modelling the average income dependence on work experience in the USA from 1967 to 2002," Working Papers 11, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2005-11
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2005-11.pdf
    File Function: First version, 2005
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    Citations

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    Cited by:

    1. Clark P. Bishop & C. Richard Shumway & Philip R. Wandschneider, 2008. "Agent Heterogeneity in Adoption of Anaerobic Digestion Technology: Integrating Economic, Diffusion and Behavioral Innovation Theory," Working Papers 2008-8, School of Economic Sciences, Washington State University.
    2. Kitov, Ivan & Kitov, Oleg, 2015. "How universal is the law of income distribution? Cross country comparison," MPRA Paper 67145, University Library of Munich, Germany.
    3. Clark P. Bishop & C. Richard Shumway & Philip R. Wandschneider, 2010. "Agent Heterogeneity in Adoption of Anaerobic Digestion Technology: Integrating Economic, Diffusion, and Behavioral Innovation Theories," Land Economics, University of Wisconsin Press, vol. 86(3).

    More about this item

    Keywords

    personal income distribution; mean income; median income; microeconomic modelling; USA; real GDP; macroeconomics;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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