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Experience vs. Obsolescence: A Vintage-Human-Capital Model

  • Matthias Kredler

    (Universidad Carlos III Madrid)

horizon version of Chari & Hopenhayn’s (1991) vintage-human-capital model. Different skill levels inside a vintage are complementary in production. I establish equivalence between competitive equilibrium and a planner’s problem, which ensures uniqueness of equilibrium. Returns to skill and tenure premia are highest in young vintages, where skill is scarcest and agents accumulate human capital fastest. As the vintage ages, the skill premium decreases and vanishes entirely upon vintage death. The results are in line with German linked employer-employee data: Young establishments pay higher tenure premia but lower mean wages than old establishments.

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Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 369.

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Date of creation: 2010
Date of revision:
Handle: RePEc:red:sed010:369
Contact details of provider: Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA
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  10. Claudio Michelacci & Vincenzo Quadrini, 2004. "Financial Markets and Wages," 2004 Meeting Papers 116, Society for Economic Dynamics.
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  12. 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.
  13. Gordon, Robert J., 1990. "The Measurement of Durable Goods Prices," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226304557.
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