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  3. American Economic Review
  4. February 2015
  5. The Price of Experience

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

The Price of Experience

  • Hyeok Jeong
  • Yong Kim
  • Iourii Manovskii
American Economic Review
vol. 105, no. 2, February 2015
(pp. 784–815)
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Abstract

We identify a key role of factor supply, driven by demographic changes, in shaping several empirical regularities that are a focus of active research in macro and labor economics. In particular, demographic changes alone can account for the large movements of the return to experience over the last four decades, for the differential dynamics of the age premium across education groups emphasized by Katz and Murphy (1992), for the differential dynamics of the college premium across age groups emphasized by Card and Lemieux (2001), and for the changes in cross-sectional and cohort-based life-cycle profiles emphasized by Kambourov and Manovskii (2005). (JEL D91, E24, I23, J11, J24, J31)

Citation

Jeong, Hyeok, Yong Kim, and Iourii Manovskii. 2015. "The Price of Experience." American Economic Review, 105 (2): 784–815. DOI: 10.1257/aer.20080841

Additional Materials

JEL Classification

  • D15 Intertemporal Household Choice; Life Cycle Models and Saving
  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • I23 Higher Education; Research Institutions
  • J11 Demographic Trends, Macroeconomic Effects, and Forecasts
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials