The Long-Term Consequences of the Tech Bubble on Skilled Workers' Earnings

46 Pages Posted: 4 Jun 2018 Last revised: 2 Apr 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

Abstract

Using matched employer-employee data from France, we uncover an ICT boom- cohort discount on the long-term earnings of the large cohort of skilled workers entering in the Information and Communication Technology (ICT) sector during the 1990s Tech Bubble. 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. We provide suggestive evidence that these workers accumulate human capital early in their career that rapidly depreciates.

Keywords: Tech Bubble, Labor Misallocation

JEL Classification: E24, J24, O33

Suggested Citation

Hombert, Johan and Matray, Adrien, The Long-Term Consequences of the Tech Bubble on Skilled Workers' Earnings (February 1, 2019). Paris December 2018 Finance Meeting EUROFIDAI - AFFI. Available at SSRN: https://ssrn.com/abstract=3190030 or http://dx.doi.org/10.2139/ssrn.3190030

Johan Hombert (Contact Author)

HEC Paris - Finance Department ( email )

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

Adrien Matray

Princeton University ( email )

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

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