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Vintage human capital and learning curves

Author

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  • Kredler, Matthias
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.

Suggested Citation

  • Kredler, Matthias, 2014. "Vintage human capital and learning curves," Journal of Economic Dynamics and Control, Elsevier, vol. 40(C), pages 154-178.
    • Handle: RePEc:eee:dyncon:v:40:y:2014:i:c:p:154-178
    DOI: 10.1016/j.jedc.2014.01.003
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    References listed on IDEAS

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    31. Goetz, Renan-Ulrich & Hritonenko, Natali & Yatsenko, Yuri, 2008. "The optimal economic lifetime of vintage capital in the presence of operating costs, technological progress, and learning," Journal of Economic Dynamics and Control, Elsevier, vol. 32(9), pages 3032-3053, September.
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    2. Natali Hritonenko & Nobuyuki Kato & Yuri Yatsenko, 2017. "Optimal Control of Investments in Old and New Capital Under Improving Technology," Journal of Optimization Theory and Applications, Springer, vol. 172(1), pages 247-266, January.

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    More about this item

    Keywords

    Vintage human capital; Tenure-wage profiles; Learning curve; Infinite-dimensional state space; Lagrange-multiplier theorem;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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