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Title: Learning, Career Paths, and the Distribution of Wages

Citation Type: Journal Article

Publication Year: 2019

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Abstract: We develop a theory of career paths and earnings in an economy in which agents organize in production hierarchies. Agents climb these organizational hierarchies as they learn stochastically from other individuals. We study the resulting career paths for agents with different schooling levels. Earnings grow over time as agents acquire knowledge and occupy positions with larger numbers of subordinates. The cross-sectional variance of earnings also increase with experience. We contrast these and other implications of the theory with U.S. census data for the period 1990 to 2010. The increase in wage inequality over this period, and other concurring phenomena, can be rationalized with a shift in the distribution of the complexity and profitability of technologies relative to the distribution of knowledge in the population.

Url: https://www.aeaweb.org/articles?id=10.1257/mac.20170390

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Authors: Caicedo, Santiago; Lucas Jr., Robert E; Rossi-Hansberg, Esteban

Periodical (Full): American Economic Journal: Macroeconomic

Issue: 1

Volume: 11

Pages: 49-88

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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