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Title: Technological Progress and the Earnings of Older Workers

Citation Type: Miscellaneous

Publication Year: 2012

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Abstract: This paper examines whether the earnings of older US workers track overall increases in TFP as comprehensively as those of their younger colleagues. The US population is aging: longevity is increasing, while fertility is, if anything, trending in the opposite direction. If the marginal product of younger workers rises proportionately with TFP but the marginal product of older workers lags behind, then innovation will, in effect, tend to diffuse more slowly as the labor force ages. Retirement timing may be influenced as well. In general, as longevity rises, we expect both work lives and retirement spans to increase. Workers optimal allocations of extra years of life between career and retirement will, however, be sensitive to the rate of pay available. In fact, we find that the pay of older US employees does not follow TFP growth as closely as the remuneration of younger workers though the difference is, perhaps, surprisingly small and we attempt to provide quantitative assessments of the likely impact on the economy...

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Authors: Gorodnichenko, Yuki; Stolyarov, Dmitriy; Song, Jae; Laitner, John

Publisher: University of Michigan

Data Collections: IPUMS USA, IPUMS CPS

Topics: Aging and Retirement, Labor Force and Occupational Structure

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