Life-Cycle Wage Growth and Firm Productivity in Developed and Developing Economics

Kerstin Holzheu () and Juan Munoz-Morales
Additional contact information
Kerstin Holzheu: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics

Sciences Po Economics Publications (main) from HAL

Abstract: Life-cycle wage growth varies across countries. We examine the role of the firm productivity distribution by introducing a random-search model that disentangles firm productivity, on-the-job learning, and labor-market frictions. Estimates for Brazil, Colombia, and the United States reveal two firm-side disadvantages: a compressed right tail of high-productivity firms in Colombia, and a long left tail of low-productivity firms in Brazil. Counterfactuals show that equating each country's firm-productivity distribution to that of the United States closes most of the crosscountry gap in life-cycle wage growth: Brazil's wage growth rises from 73 to 103 percent of the U.S. value, and Colombia's from 52 to 115 percent. The conclusion is robust to alternative functional forms, education residualization, and external discipline on the productivity tail.

Keywords: Developing countries; Income profiles; Labour markets (search for similar items in EconPapers)
Date: 2026-06-06
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-05030546v3
References: Add references at CitEc
Citations:

Downloads: (external link)
https://sciencespo.hal.science/hal-05030546v3/document (application/pdf)

Related works:
Working Paper: Life-Cycle Wage Growth and Firm Productivity in Developed and Developing Economics (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-05030546

Access Statistics for this paper

More papers in Sciences Po Economics Publications (main) from HAL
Bibliographic data for series maintained by Contact - Sciences Po Department of Economics ().