Experience vs. Obsolescence: A Vintage-Human-Capital Model
I combine an infinite-horizon version of Ben-Porath’s (1967) model of human-capital accumulation with a vintage structure as in Chari & Hopenhayn (1991). Different skill levelsinside a vintage are complementary in production. Vintage-specific human capital is accumulated based on workers’ optimal strategies and is lost when the technology is phased out by an endogenous firm decision. I establish equivalence between competitive equilibrium and a planner’s problem. It is shown that returns to skill are highest in young vintages. Accelerated technological change shortens the life cycle of a technology and speeds up obsolescence; the premium on tenure rises because more workers are concentrated in young technologies with high skill premia. A calibration exercise comparing two steady states shows that the model quantitatively accounts for the changes in the experience premium, earnings dispersion and earnings turbulence in German data.
|Date of creation:||28 Jul 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jason G. Cummins & Giovanni L. Violante, 2002.
"Investment-specific technical change in the US (1947-2000): measurement and macroeconomics consequences,"
Finance and Economics Discussion Series
2002-10, Board of Governors of the Federal Reserve System (U.S.).
- Jason G. Cummins & Giovanni L. Violante, 2002. "Investment-Specific Technical Change in the US (1947-2000): Measurement and Macroeconomic Consequences," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 243-284, April.
- Cummins, Jason G & Violante, Giovanni L, 2002. "Investment-Specific Technical Change in the US (1947-2000): Measurement and Macroeconomic Consequences," CEPR Discussion Papers 3584, C.E.P.R. Discussion Papers.
- Ken Burdett & Melvyn Coles, 2003. "Equilibrium Wage-Tenure Contracts," Econometrica, Econometric Society, vol. 71(5), pages 1377-1404, 09.
- Klette, Tor Jakob & Kortum, Samuel S, 2002.
"Innovating Firms and Aggregate Innovation,"
CEPR Discussion Papers
3248, C.E.P.R. Discussion Papers.
- Jakob Klette & Samuel Kortum, 2002. "Innovating firms and aggregate innovation," Staff Report 300, Federal Reserve Bank of Minneapolis.
- Klette, Tor Jakob & Kortum, Samuel, 2002. "Innovating Firms and Aggregate Innovation," Memorandum 02/2002, Oslo University, Department of Economics.
- Tor Jakob Klette & Samuel Kortum, 2002. "Innovating Firms and Aggregate Innovation," NBER Working Papers 8819, National Bureau of Economic Research, Inc.
- Grossman, G.M. & Helpman, E., 1989.
"Quality Ledders In The Theory Of Growth,"
148, Princeton, Woodrow Wilson School - Public and International Affairs.
- Mark Hugget & Gustavo Ventura & Amir Yaron, 2002.
"Human Capital and Earnings Distribution Dynamics,"
NBER Working Papers
9366, National Bureau of Economic Research, Inc.
- Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
- Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
- James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003.
"Fifty Years of Mincer Earnings Regressions,"
NBER Working Papers
9732, National Bureau of Economic Research, Inc.
- Michelacci, Claudio & Quadrini, Vincenzo, 2005.
"Financial Markets and Wages,"
CEPR Discussion Papers
4867, C.E.P.R. Discussion Papers.
- Andrew Atkeson & Patrick J. Kehoe, 2005.
"Modeling and Measuring Organization Capital,"
Journal of Political Economy,
University of Chicago Press, vol. 113(5), pages 1026-1053, October.
- repec:ucp:bknber:9780226304557 is not listed on IDEAS
- Peter Gottschalk & Mary Joyce, 1997.
"Cross-National Differences in the Rise in Earnings Inequality: Market and Institutional Factors,"
Boston College Working Papers in Economics
366, Boston College Department of Economics.
- Peter Gottschalk & Mary Joyce, 1998. "Cross-National Differences In The Rise In Earnings Inequality: Market And Institutional Factors," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 489-502, November.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:10200. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.