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The Economics of Has-Beens

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  • Glenn MacDonald
  • Michael Weisbach

Abstract

Evolution of technology causes human capital to become obsolete. We study this phenomenon in an overlapping generations setting, assuming it is hard to predict how technology will evolve, and that older workers find updating uneconomic. Among our results is the proposition that (under certain conditions) a more rapid pace of technological advance is especially unfavorable to the old in the sense that the implied within-industry division of output or income between young and old becomes much more skewed, i.e., a smaller number of young earn comparatively more. We apply our results to architecture, an occupation in which the has-beens phenomenon has had a particularly acute impact.

Suggested Citation

  • Glenn MacDonald & Michael Weisbach, 2001. "The Economics of Has-Beens," NBER Working Papers 8464, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8464
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    References listed on IDEAS

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    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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