Abstract

This paper documents how life cycle wage growth varies across countries. We harmonize repeated cross-sectional surveys from a set of countries of all income levels and then measure how wages rise with potential experience. Our main finding is that experience-wage profiles are on average twice as steep in rich countries as in poor countries. In addition, more educated workers have steeper profiles than the less educated; this accounts for around one-third of cross-country differences in aggregate profiles. Our findings are consistent with theories in which workers in poor countries accumulate less human capital or face greater search frictions over the life cycle.

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Citation

Lagakos, David, Benjamin Moll, Tommaso Porzio, Nancy Qian, and Todd Schoellman. "Life-Cycle Wage Growth across Countries." Journal of Political Economy 126, no. 2 (April 18, 2018): 797-849.

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