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Make Yourselves Scarce: The Effect of Demographic Change on the Relative Wages and Employment Rates of Experienced Workers

Böhm, Michael Johannes and Siegel, Christian (2019) Make Yourselves Scarce: The Effect of Demographic Change on the Relative Wages and Employment Rates of Experienced Workers. Discussion paper. Institute of Labor Economics University of Kent School of Economics Discussion Paper 19/02. (doi:University of Kent School of Economics Discussion Paper 19/02) (KAR id:77654)

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Abstract

We show that rising supply of experience not only reduces experienced workers’relative wages but also their relative labor market participation. From a theoretical model we derive predictions which we quasi-experimentally investigate, using variation across U.S. local labor markets (LLMs) over the last decades and instrumenting experience supply by the LLMs' age structures a decade earlier. We find that aging substantially reduces experienced workers' relative wages and employment rates, and also their labor market participation rates. Our results imply that the effect of demographic change on labor markets might be more severe than previously recognized, as it reaches beyond wages.

Item Type: Monograph (Discussion paper)
DOI/Identification number: University of Kent School of Economics Discussion Paper 19/02
Additional information: School of Economics Discussion Paper 19/02
Uncontrolled keywords: Demographic Change, Employment of Experienced Workers, Return to Experience
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Divisions: Divisions > Division of Human and Social Sciences > School of Economics
Depositing User: Christian Siegel
Date Deposited: 21 Oct 2019 15:19 UTC
Last Modified: 25 Feb 2021 14:22 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/77654 (The current URI for this page, for reference purposes)
Siegel, Christian: https://orcid.org/0000-0002-1686-8686
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