Kredler, Matthias (2008): Experience vs. Obsolescence: A Vintage-Human-Capital Model.
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I combine an infinite-horizon version of Ben-Porath’s (1967) model of human-capital accumulation with a vintage structure as in Chari & Hopenhayn (1991). Different skill levelsinside a vintage are complementary in production. Vintage-specific human capital is accumulated based on workers’ optimal strategies and is lost when the technology is phased out by an endogenous firm decision. I establish equivalence between competitive equilibrium and a planner’s problem. It is shown that returns to skill are highest in young vintages. Accelerated technological change shortens the life cycle of a technology and speeds up obsolescence; the premium on tenure rises because more workers are concentrated in young technologies with high skill premia. A calibration exercise comparing two steady states shows that the model quantitatively accounts for the changes in the experience premium, earnings dispersion and earnings turbulence in German data.
|Item Type:||MPRA Paper|
|Original Title:||Experience vs. Obsolescence: A Vintage-Human-Capital Model|
|Keywords:||Vintage human capital, age-earnings profiles, partial differential equations|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
C - Mathematical and Quantitative Methods > C6 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling > C63 - Computational Techniques; Simulation Modeling
J - Labor and Demographic Economics > J0 - General > J01 - Labor Economics: General
|Depositing User:||Matthias Kredler|
|Date Deposited:||27. Aug 2008 17:14|
|Last Modified:||13. Feb 2013 13:18|
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