Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/196741 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12243
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We argue that rising supply of experience not only reduces experienced workers' relative wages but also their relative labor market participation. From a theoretical model we derive predictions which we quasi-experimentally investigate, using variation across U.S. local labor markets (LLMs) over the last decades and instrumenting experience supply by the LLMs' age structures a decade earlier. We find that aging substantially reduces experienced workers' relative wages and employment rates, and also their labor market participation rates. Our results imply that the effect of demographic change on labor markets might be more severe than previously recognized, as it reaches beyond wages.
Subjects: 
demographic change
employment of experienced workers
return to experience
JEL: 
J11
J21
J31
Document Type: 
Working Paper

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