SMU SOE Seminar (April 5, 2023): Occupations, Life Cycle Wage Growth and Inequality

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ABSTRACT We document that the age-profiles of mean wages and wage inequality over the life cycle vary substantially across occupations. It is well known that average wages in some occupations are higher than average wages in other occupations. First, we show that higher average wages in an occupation largely reflect higher lifecycle wage growth in that occupation. Second, we further document that a higher lifecycle wage growth in an occupation is mostly due to higher lifecycle wage growth in the top deciles of the wage distribution in that occupation. We build a dynamic Roy model, extending the framework in Keane and Wolpin (1997) by introducing heterogeneous learning abilities. The parametrized model is quantitatively consistent with the documented empirical facts. We conduct several counterfactual experiments, and one of the messages that emerges from the analysis is that occupation differences in average wages have little power to capture the effect of changes in occupational employment on inequality. Click here to view the CV.
		PRESENTER Gueorgui Kambourov University of Toronto
		RESEARCH FIELDS Macroeconomics
		DATE: 5 April 2023 (Wednesday)
		TIME: 2pm - 3.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903