Technology Boom, Labor Reallocation, and Human Capital Depreciation

63 Pages Posted: 4 Dec 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: November 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.

JEL Classification: E24, J24, O33

Suggested Citation

Hombert, Johan and Matray, Adrien, Technology Boom, Labor Reallocation, and Human Capital Depreciation (November 2019). CEPR Discussion Paper No. DP14136, Available at SSRN:

Johan Hombert (Contact Author)

HEC Paris - Finance Department ( email )

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

Adrien Matray

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

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