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Learning, career paths, and the distribution of wages

Author(s): Caicedo, Santiago; Lucas Jr., Robert E.; Rossi-Hansberg, Esteban A.

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Abstract: © 2019 American Economic Association. We develop a theory of career paths and earnings where agents organize in production hierarchies. Agents climb these hierarchies as they learn stochastically from others. Earnings grow as agents acquire knowledge and occupy positions with more subordinates. We contrast these and other implications with US census data for the period 1990 to 2010, matching the Lorenz curve of earnings and the observed mean experience- earnings profiles. We show the increase in wage inequality over this period can be rationalized with a shift in the level of the complexity and profitability of technologies relative to the distribution of knowledge in the population.
Publication Date: Jan-2019
Citation: Caicedo, S, Lucas, RE, Rossi-Hansberg, E. (2019). Learning, career paths, and the distribution of wages. American Economic Journal: Macroeconomics, 11 (1), 49 - 88. doi:10.1257/mac.20170390
DOI: doi:10.1257/mac.20170390
ISSN: 1945-7707
EISSN: 1945-7715
Pages: 49 - 88
Type of Material: Journal Article
Journal/Proceeding Title: American Economic Journal: Macroeconomics
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.



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