Human capital accumulation and labour market equilibrium

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 4215

Classification and Topics

• Classification: Wirtschaft ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Monopsony; Segmented Labor Markets ; Unemployment: Models, Duration, Incidence, and Job Search
• Subject: Search ; wage dispersion ; human capital accumulation ; Arbeitsmarkttheorie ; Arbeitsuche ; Bildungsinvestition ; Berufsbegleitende Ausbildung ; Berufserfahrung ; Lohnstruktur ; Gleichgewicht ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Burdett, Ken ; Carrillo-Tudela, Carlos ; Coles, Melvyn G.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/35831
• URN: urn:nbn:de:101:1-20090619109
• Last update: 10.03.2025, 11:44 AM CET