Vintage human capital and learning curves Articles uri icon

publication date

  • March 2014

start page

  • 154

end page

  • 178

volume

  • 40

international standard serial number (ISSN)

  • 0165-1889

electronic international standard serial number (EISSN)

  • 1879-1743

abstract

  • I study a vintage-human-capital model in which long-lived workers accumulate human capital following an exogenous learning curve. Different skill levels inside a vintage are complementary in production; this makes the ex ante homogeneous workers enter different vintages. The continuous-time framework allows me to study the timing decision for the technology phase-out differentially and to derive sharp characterization for wages and the distribution of workers in the dying technology. I show how to posit and solve a planner's problem and construct equilibrium in this way. Consistent with empirical evidence, I show that the experience premium is always positive but diminishes as a technology ages. The connection between workers' learning curves and the technology's progress curve is characterized. (C) 2014 Elsevier B.V. All rights reserved.

keywords

  • vintage human capital; tenure-wage profiles; learning curve; infinite-dimensional state space; lagrange-multiplier theorem; technological-progress; economic growth; accumulation; replacement; investment; equipment; lifetime; adoption; firms; model