Working Paper: NBER ID: w20457
Authors: Hyeok Jeong; Yong Kim; Iourii Manovskii
Abstract: We identify a key role of factor supply, driven by demographic changes, in shaping several empirical regularities that are a focus of active research in macro and labor economics. In particular, demographic changes alone can account for the large movements of the return to experience over the last four decades, for the differential dynamics of the age premium across education groups emphasized by Katz and Murphy (1992), for the differential dynamics of the college premium across age groups emphasized by Card and Lemieux (2001), and for the changes in cross-sectional and cohort-based life-cycle profiles emphasized by Kambourov and Manovskii (2005).
Keywords: No keywords provided
JEL Codes: E24; E25; J24; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Demographic changes (J11) | Return to experience (Y60) |
| Demographic changes (J11) | Differential dynamics of age premium across education groups (J79) |
| Demographic changes (J11) | Differential dynamics of college premium across age groups (D29) |
| Demographic changes (J11) | Variations in effective supply of experience (J24) |
| Variations in effective supply of experience (J24) | Relative price of experience (P22) |
| Relative price of experience (P22) | Wages of older workers (J31) |
| Demographic changes (J11) | Wage differentials across education groups (J31) |