Abstract
Current theories offer conflicting guidance on how demographic changes in the labour force affect earnings and advancement over the working career. Human capital theory, as reflected in Welch (1978) for example, would predict that larger age cohorts than normal would earn less throughout their careers.1 If, as human-capital theory assumes, earnings are based on productivity, then the increased competition for complementary inputs must lower productivity and hence salaries. Members of larger labour cohorts will therefore have lower age-earnings profiles.
Keywords
- Labour Force
- Career Path
- Indifference Curve
- Human Capital Theory
- Promotional System
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References
Arthur, W. B. (1980), ‘Career Advancement and Professional Labor Markets: Implications of the Baby Boom, Delayed Retirement, and Job Shrinkage’, forthcoming.
Becker, G. S. (1964) Human Capital (National Bureau of Economic Research).
Cornford, A. (1979), ‘A Life-Cycle Model of Career Experience: The American Academic Labour Force’, unpublished manuscript.
Keyfitz, N. (1973), ‘Individual Mobility in a Stationary Population’, Population Studies, 27, 335–352.
Kreps, J. M. (1977), ‘Age, Work and Income’, Southern Economic Journal, 43, 1423–37.
Mincer, J. (1971), ‘Schooling, Age and Earnings’ (National Bureau of Economic Research).
Rosen, S. (1972), ‘Learning and Experience in the Labor Market’, Journal of Human Resources, 7, 327–42.
Welch, F. (1978), ‘Effects of Cohort Size on Earnings: The Baby Boom Babies’ Financial Bust’, unpublished mimeo., The Rand Corporation.
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© 1983 International Economic Association
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Arthur, W.B. (1983). Age and Earnings in the Labour Market: Implications of the 1980s Labour Bulge. In: Streeten, P., Maier, H. (eds) Human Resources, Employment and Development Volume 2: Concepts, Measurement and Long-Run Perspective. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17203-0_21
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DOI: https://doi.org/10.1007/978-1-349-17203-0_21
Publisher Name: Palgrave Macmillan, London
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