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Life cycle wage growth across countries

Author(s): Lagakos, David; Moll, Benjamin; Porzio, Tommaso; Qian, Nancy; Schoellman, Todd

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Abstract: © 2018 by The University of Chicago. All rights reserved. This paper documents how life cycle wage growth varies across countries. We harmonize repeated cross-sectional surveys from a set of countries of all income levels and then measure how wages rise with potential experience. Our main finding is that experience-wage profiles are on average twice as steep in rich countries as in poor countries. In addition, more educated workers have steeper profiles than the less educated; this accounts for around one-third of cross-country differences in aggregate profiles. Our findings are consistent with theories in which workers in poor countries accumulate less human capital or face greater search frictions over the life cycle.
Publication Date: 12-Mar-2018
Citation: Lagakos, D, Moll, B, Porzio, T, Qian, N, Schoellman, T. (2018). Life cycle wage growth across countries. Journal of Political Economy, 126 (2), 797 - 849. doi:10.1086/696225
DOI: doi:10.1086/696225
ISSN: 0022-3808
EISSN: 1537-534X
Pages: 1 - 53
Type of Material: Journal Article
Journal/Proceeding Title: Journal of Political Economy
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.

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