Full Citation

Title: Demographic Change and the Return to Experience

Citation Type: Working Paper

Publication Year: 2008

ISBN:

ISSN:

DOI: 10.2139/ssrn.1122963

NSFID:

PMCID:

PMID:

Abstract: We propose and estimate a model in which changes in the demographic composition of the labor force may affect the returns to labor market experience. We consider workers as providing two distinct productive services - physical effort, or "labor," and services of the skill accumulated with labor market experience, or "experience." The key element in the model is the aggregate production function that allows for complementarity between the appropriately measured aggregate stocks of labor and experience. The parameters of the aggregate technology are identified by estimating individual earnings equations that consistently aggregate. Both time-series and cross-sectional data confirm strong experience-labor complementarity. We find that the observed demographic changes that drive the aggregate experience to labor ratio account nearly perfectly for the substantial changes in the experience premium over time.

Url: http://www.ssrn.com/abstract=1122963

User Submitted?: No

Authors: Jeong, Hyeok; Kim, Yong; Manovskii, Iourii

Series Title: IEPR Working Paper

Publication Number: 08.08

Institution: University of Southern California

Pages:

Publisher Location: Los Angelos

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

Countries: