News

INARBE organiza este seminario que se celebrará el día 14 de noviembre en la sala de Juntas de la Facultad de Ciencias Económicas y Empresariales a las 12,00h.

Abstract

Participation of middle aged men with upper secondary education or less has decreased over the last two decades in the US. This comes together with wage stagnation for this demographic group which we report to be significantly accounted for by to a reduction in the premium to their experience. We pose a general equilibrium model of the labor market with frictions, participation decisions and endogenous accumulation of skills through learning by doing to understand these facts in light of existing potentially relevant hypothesis. We use this unified framework to quantitatively assess the implications of: i) an increase in the probability of skills loss during non-employment spells (turbulence), ii) a reduction in the efficiency of the matching technology of the labor market, iii) a reduction in the productivity of low educated workers (possibly due to robotization), iv) an increase in the value of not participating due to the improvement of assistance programs and amusement technologies and v), a decline in the bargaining power of the worker. We find that the previous hypothesis are able to produce the observed reduction in participation, except in the case of v). However, only the increase in turbulence and the reduction in matching efficiency are in addition consistent with the reduction in the return to experience.