Technology Boom, Labor Reallocation, and Human Capital Depreciation
60 Pages Posted: 14 Jun 2018 Last revised: 18 Jan 2022
Date Written: December 20, 2021
During the late 1990s boom, one-third of skilled labor market entrants joined the Information and Communication Technology (ICT) sector. We use French linked employer-employee data to study their wage dynamics. 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 in other sectors. The long-run wage discount is not explained by selection, job losses or persistently low demand for ICT services. It is concentrated in high-skill occupations, consistent with obsolescence of technical skills accelerating during a technological boom.
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