Technology Boom, Labor Reallocation, and Human Capital Depreciation

Johan Hombert and Adrien Matray

No 14136, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Using matched employer-employee data from France, we uncover an "ICT boom-cohort discount" on the long-term wage of the large cohort of skilled workers entering in the Information and Communication Technology (ICT) sector during the late 1990s technology boom. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out, relative to similar workers who started outside the ICT sector. Other moments of the wage distribution are inconsistent with selection effects. These workers accumulate human capital early in their career that rapidly depreciates, implying that labor reallocation during technology booms can have long-lasting effects.

JEL-codes: E24 J24 O33 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-ict and nep-mac
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