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Learning, Career Paths, and the Distribution of Wages†

Learning, Career Paths, and the Distribution of Wages† AbstractWe develop a theory of career paths and earnings where agents organize in production hierarchies. Agents climb these hierarchies as they learn stochastically from others. Earnings grow as agents acquire knowledge and occupy positions with more subordinates. We contrast these and other implications with US census data for the period 1990 to 2010, matching the Lorenz curve of earnings and the observed mean experience-earnings profiles. We show the increase in wage inequality over this period can be rationalized with a shift in the level of the complexity and profitability of technologies relative to the distribution of knowledge in the population. (JEL D83, E24, J24, J31) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Macroeconomics American Economic Association

Learning, Career Paths, and the Distribution of Wages†

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Publisher
American Economic Association
Copyright
Copyright © 2019 © American Economic Association
ISSN
1945-7715
DOI
10.1257/mac.20170390
Publisher site
See Article on Publisher Site

Abstract

AbstractWe develop a theory of career paths and earnings where agents organize in production hierarchies. Agents climb these hierarchies as they learn stochastically from others. Earnings grow as agents acquire knowledge and occupy positions with more subordinates. We contrast these and other implications with US census data for the period 1990 to 2010, matching the Lorenz curve of earnings and the observed mean experience-earnings profiles. We show the increase in wage inequality over this period can be rationalized with a shift in the level of the complexity and profitability of technologies relative to the distribution of knowledge in the population. (JEL D83, E24, J24, J31)

Journal

American Economic Journal: MacroeconomicsAmerican Economic Association

Published: Jan 1, 2019

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