Life-cycle wage growth across countries

Type Working Paper
Title Life-cycle wage growth across countries
Author(s)
Publication (Day/Month/Year) 2015
URL http://www.econ.yale.edu/~nq3/NANCYS_Yale_Website/resources/papers/LMPQS_JPER1.pdf
Abstract
This paper documents how life-cycle wage growth varies across countries. We harmonize repeated
cross-sectional surveys from a set of countries of all income levels and then use these data to measure how
wages rise with potential experience. Our main finding is that experience-wage profiles are on average
twice as steep in rich countries as in poor countries. In addition, more educated workers have steeper
experience-wage profiles on average than those with less education; this accounts for around one-third of
cross-country differences in aggregate profiles. Our findings are consistent with theories in which workers
in poor countries accumulate less human capital over the life cycle and theories in which more severe
search frictions in poor countries prevent workers from climbing the job ladder.

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