Working Paper: CEPR ID: DP14136
Authors: Johan Hombert; Adrien Matray
Abstract: Using matched employer-employee data from France, we uncover an "ICT boom-cohort discount" on the long-term wage of the large cohort of skilled workers entering in the Information and Communication Technology (ICT) sector during the late 1990s technology boom. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out, relative to similar workers who started outside the ICT sector. Other moments of the wage distribution are inconsistent with selection effects. These workers accumulate human capital early in their career that rapidly depreciates, implying that labor reallocation during technology booms can have long-lasting effects.
Keywords: ICT boom; labor reallocation; human capital depreciation
JEL Codes: J24; O33; E24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ICT boom cohort entry (L96) | Initial wage advantage (J31) |
| Initial wage advantage (J31) | Wage discount by 2015 (J39) |
| Wage discount by 2015 (J39) | Slower wage growth compared to other sectors (J39) |
| Wage discount by 2015 (J39) | Within-job phenomenon (J63) |
| Human capital depreciation (J24) | Wage discount by 2015 (J39) |
| Technologically intensive roles (O14) | Stronger wage discount (J31) |