The Long-Term Consequences of the Tech Bubble on Skilled Workers' Earnings
Johan Hombert and
Adrien Matray ()
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Johan Hombert: HEC Paris - Finance Department
Adrien Matray: Princeton University
No 1294, HEC Research Papers Series from HEC Paris
We use French matched employer-employee data to track skilled individuals entering the labor market during the late 1990s tech bubble. The boom led to a sharp increase in the share of skilled entrants in the tech sector, which offers relative higher wages at the time. When the boom ends, however, the wage premium reverses and these skilled workers end up with a 5.5% wage discount ten years out, relative to similar peers who started in a non-tech sector. Other moments of the wage distribution of the boom, pre-boom, and post-boom cohorts are inconsistent with explanations based on a selection effect or a cycle effect. Instead, we provide suggestive evidence that workers allocated to the booming tech sector accumulate human capital early in their career that rapidly becomes obsolete.
Keywords: ICT; ICT boom; wage dynamics (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1294
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