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  3. American Economic Journal: Macroeconomics
  4. January 2019
  5. Learning, Career Paths, and the Distribution of Wages

Learning, Career Paths, and the Distribution of Wages

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Abstract

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.

Citation

Caicedo, Santiago, Robert E. Lucas Jr., and Esteban Rossi-Hansberg. 2019. "Learning, Career Paths, and the Distribution of Wages." American Economic Journal: Macroeconomics, 11 (1): 49-88. DOI: 10.1257/mac.20170390

Additional Materials

JEL Classification

  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials
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