Pauline Corblet
(NYU Abu Dhabi)
will give a presentation on
The Impact of Education Expansions on Life-cycle Earnings
Abstract: I evidence changes in wage profiles over the life-cycle between the late 1990s and 2010s in France. Young labor market entrants enjoy higher wages than more senior workers at the same age but experience a flatter wage progression. These decreasing returns to experience are especially salient among higher education graduates: the cohort that entered the labor market in 1998 benefited from 5.8% yearly wage increases in their early career, while the cohort that started working in 2010 only obtained 4.2% increases. To conjointly explain the higher starting wages and flatter wage progression, I build a model of human capital acquisition over the life cycle, which features two occupations that differ by the amount of human capital they allow workers to accumulate. Through the lens of the model, I show that an educational expansion leads to occupation downgrading, which in turn produces the two empirical facts outlined previously.