Human Capital Accumulation and Labour Market Equilibrium

Kenneth Burdett, Carlos Carrillo-Tudela and Melvyn Coles

No 4215, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyse an equilibrium labour market with on-the-job search and experience effects (where workers learn-by-doing). The analysis yields a standard Mincer wage equation with worker fixed effects and endogenously determined firm fixed effects. It shows that learning-by-doing increases equilibrium wage dispersion consistent with the data. Equilibrium sorting - where over time more experienced workers also tend to find and quit to better paid employment - has a significant impact on wage inequality. As the model yields a cross section distribution of wages paid with the 'right' structure (the density of wages paid is single peaked with a 'fat' Pareto right tail) and yields the 'right' time profile of worker wage outcomes (the initial 10 years of a worker's career are characterised by several job changes and rapid wage growth) it yields a new, coherent statistical structure for future applied work.

Keywords: human capital accumulation; wage dispersion; search (search for similar items in EconPapers)
JEL-codes: J24 J42 J64 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2009-06
New Economics Papers: this item is included in nep-bec, nep-dge, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Published - published in: International Economic Review, 2011, 52 (3), 657 - 677

Downloads: (external link)
https://docs.iza.org/dp4215.pdf (application/pdf)

Related works:
Journal Article: HUMAN CAPITAL ACCUMULATION AND LABOR MARKET EQUILIBRIUM (2011)
Working Paper: Human Capital Accumulation and Labor Market Equilibrium (2008)
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:iza:izadps:dp4215

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().