Working Paper: NBER ID: w9366
Authors: Mark Huggett; Gustavo Ventura; Amir Yaron
Abstract: Mean earnings and measures of earnings dispersion and skewness all increase in US data over most of the working life-cycle for a typical cohort as the cohort ages. We show that a benchmark human capital model can replicate these properties from the right distribution of initial human capital and learning ability. These distributions have the property that learning ability must differ across agents and that learning ability and initial human capital are positively correlated.
Keywords: No keywords provided
JEL Codes: D3; J24; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| age (J14) | average earnings (J31) |
| age (J14) | earnings dispersion (J31) |
| age (J14) | earnings skewness (D31) |
| initial human capital (J24) | age-earnings profiles (J26) |
| learning ability (G53) | age-earnings profiles (J26) |
| initial human capital and learning ability (J24) | earnings dispersion (J31) |
| initial human capital and learning ability (J24) | earnings skewness (D31) |