Human Capital and Earnings Distribution Dynamics

39 Pages Posted: 6 Dec 2002 Last revised: 4 Feb 2021

See all articles by Mark Huggett

Mark Huggett

Georgetown University - Department of Economics

Gustavo Jaime Ventura

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Amir Yaron

University of Pennsylvania -- Wharton School of Business; National Bureau of Economic Research (NBER)

Date Written: December 2002

Abstract

Mean earnings and measures of earnings dispersion and skewness all increase in US data over most of the working life-cycle for a typical cohort as the cohort ages. We show that a benchmark human capital model can replicate these properties from the right distribution of initial human capital and learning ability. These distributions have the property that learning ability must differ across agents and that learning ability and initial human capital are positively correlated.

Suggested Citation

Huggett, Mark and Ventura, Gustavo Jaime and Yaron, Amir, Human Capital and Earnings Distribution Dynamics (December 2002). NBER Working Paper No. w9366, Available at SSRN: https://ssrn.com/abstract=359640

Mark Huggett

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-6683 (Phone)

Gustavo Jaime Ventura

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

601 Kern Building
University Park, PA 16802-3306
United States

Amir Yaron (Contact Author)

University of Pennsylvania -- Wharton School of Business ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States
215-898-1241 (Phone)
215-898-6200 (Fax)

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

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