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Technology Boom, Labor Reallocation, and Human Capital Depreciation

Author

Listed:
  • Johan Hombert

    (HEC Paris and CEPR)

  • Adrien Matray

    (Princeton University)

Abstract

We study the long-run effect on productivity of labor reallocation during a technology boom. Using French matched employer-employee data, we examine the large cohort of workers who enter the information and communication technology sector during the late 1990s boom. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out, relative to similar workers who started in other sectors. The long-run wage discount is concentrated on STEM occupations, consistent with a skill obsolescence mechanism. Other moments of the wage distribution are inconsistent with selectioneffects and negative demand shocks.

Suggested Citation

  • Johan Hombert & Adrien Matray, 2019. "Technology Boom, Labor Reallocation, and Human Capital Depreciation," Working Papers 260, Princeton University, Department of Economics, Center for Economic Policy Studies..
    • Handle: RePEc:pri:cepsud:260
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    References listed on IDEAS

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    2. Tom Astebro & Serguey Braguinsky & Yuheng Ding, 2020. "Declining Business Dynamism among Our Best Opportunities: The Role of the Burden of Knowledge," ISER Discussion Paper 1099, Institute of Social and Economic Research, The University of Osaka.

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    More about this item

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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