Experience vs. Obsolescence: A Vintage-Human-Capital Model

Matthias Kredler

No 369, 2010 Meeting Papers from Society for Economic Dynamics

Abstract: horizon version of Chari & Hopenhayn’s (1991) vintage-human-capital model. Different skill levels inside a vintage are complementary in production. I establish equivalence between competitive equilibrium and a planner’s problem, which ensures uniqueness of equilibrium. Returns to skill and tenure premia are highest in young vintages, where skill is scarcest and agents accumulate human capital fastest. As the vintage ages, the skill premium decreases and vanishes entirely upon vintage death. The results are in line with German linked employer-employee data: Young establishments pay higher tenure premia but lower mean wages than old establishments.

Date: 2010
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Related works:
Journal Article: Experience vs. obsolescence: A vintage-human-capital model (2014)
Working Paper: Experience vs. Obsolescence: A Vintage-Human-Capital Model (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed010:369

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