Technology Boom, Labor Reallocation, and Human Capital Depreciation

59 Pages Posted: 4 Jun 2018 Last revised: 12 Aug 2019

See all articles by Johan Hombert

Johan Hombert

HEC Paris - Finance Department

Adrien Matray

Princeton University

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2019


Using matched employer-employee data from France, we uncover an ICT boom-cohort discount on the long-term wage of the large cohort of skilled workers entering in the Information and Communication Technology (ICT) sector during the late 1990s technology boom. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out, relative to similar workers who started outside the ICT sector. Other moments of the wage distribution are inconsistent with selection effects. These workers accumulate human capital early in their career that rapidly depreciates, implying that labor reallocation during technology booms can have long-lasting effects.

Keywords: Tech Bubble, Labor Misallocation

JEL Classification: E24, J24, O33

Suggested Citation

Hombert, Johan and Matray, Adrien, Technology Boom, Labor Reallocation, and Human Capital Depreciation (February 1, 2019). Paris December 2018 Finance Meeting EUROFIDAI - AFFI, Available at SSRN: or

Johan Hombert (Contact Author)

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351

Adrien Matray

Princeton University ( email )

Bendheim Center for Finance
26 Prospect Avenue
Princeton, NJ 08540
United States

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