Learning, Career Paths, and the Distribution of Wages

Santiago Caicedo, Robert Lucas and Esteban Rossi-Hansberg

No 22151, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a theory of career paths and earnings in an economy in which agents organize in production hierarchies. Agents climb these organizational hierarchies as they learn stochastically from other individuals. Earnings grow over time as agents acquire knowledge and occupy positions with larger numbers of subordinates. We contrast these and other implications of the theory with U.S. census data for the period 1990 to 2010. The model matches well the Lorenz curve of earnings as well as the observed mean experience-earnings profiles. We show that the increase in wage inequality over this period can be rationalized with a shift in the distribution of the complexity and profitability of technologies relative to the distribution of knowledge in the population.

JEL-codes: E25 J24 J31 O3 O4 (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-lma and nep-mac
Note: EFG
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Citations: View citations in EconPapers (11)

Published as Santiago Caicedo & Robert E. Lucas & Esteban Rossi-Hansberg, 2019. "Learning, Career Paths, and the Distribution of Wages," American Economic Journal: Macroeconomics, vol 11(1), pages 49-88.

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Journal Article: Learning, Career Paths, and the Distribution of Wages (2019)
Working Paper: Learning, Career Paths, and the Distribution of Wages (2016)
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