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Title: Historical Accidents and Comparative Advantages in the Allocation of Labor

Citation Type: Miscellaneous

Publication Year: 2008

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Abstract: This paper explores the dynamics of the division of labor across generations. The model studies the role of played by differences in ability and by differences in opportunities created by the different time horizon across workers. In this framework, both the distribution of abilities and the timing of arrival in the labor market determine the distribution of generations across industries. At steady state, the occupational choice of workers only depends on the distribution of abilities across the population as in the classical Roy model. During the transition, it depends on both the timing of arrival in the labor market and on the distribution of comparative advantages. Empirical evidences from US Census data from 1940 to 2005 broadly confirm the implications of the model. I find that age differences across industries are large but also that they fluctuate over time. In line with the predictions of the model, industries in which cohort effects are persistent tend to be industries with a high wage differential and higher returns to experience. JEL classification: E24, J24

Url: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.357.8988&rep=rep1&type=pdf

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Authors: Verdugo, Gregory

Publisher: Université de Toulouse

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

Countries: United States