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Human Capital Accumulation and Labour Market Equilibrium

Burdett, Ken and Carrillo-Tudela, Carlos and Coles, Melvyn Human Capital Accumulation and Labour Market Equilibrium. UNSPECIFIED. UNSPECIFIED.

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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.

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: J24, J42, J64, human capital accumulation, wage dispersion, search
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 03 Jul 2012 15:47
Last Modified: 09 Oct 2020 15:15
URI: http://repository.essex.ac.uk/id/eprint/2738

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