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Title: Why are Life-Cycle Earnings Profiles Getting Flatter?

Citation Type: Journal Article

Publication Year: 2017

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Abstract: The authors present a simple, two-period model of human capital accumulation on the job and through college attainment. They use a calibrated version of the model to explain the observed flatten- ing of the life-cycle earnings profiles of two cohorts of workers. The model accounts for more than 55 percent of the observed flattening for high school-educated and for college-educated workers. Two channels generate the flattening in the model: selection (or higher college attainment) and a higher skill price for the more recent cohort. Absent selection, the model would have accounted for no flattening for high school-educated workers and about 23 percent of the observed flattening for college-educated workers.

Url: https://pdfs.semanticscholar.org/92a6/a7e5beebd87da710f1d2dc34689eef750a48.pdf

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Authors: Ravikumar, B; Vandenbroucke, Guillaume

Periodical (Full): Federal Reserve Bank of St. Louis Review

Issue: 3

Volume: 99

Pages: 245-57

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

Countries: United States