Using data on French male wage workers observed over 30 years, we estimate by random and …xed e¤e... more Using data on French male wage workers observed over 30 years, we estimate by random and …xed e¤ect methods a wage equation with pervasive heterogeneity. Individual wage pro…les are derived from a human capital investment model and described by a level, a slope and a curvature. Among others, our empirical application delivers original results on issues like the Mincer dip, and the time-varying correlations between wage growth and levels, or between initial wages and growth. Static and long-run inequality indices can easily be compared and decomposed into their multidimensional components.
We propose an original model of human capital investments after leaving school in which individua... more We propose an original model of human capital investments after leaving school in which individuals di¤er in their initial human capital obtained at school, their rate of return, their costs of human capital investments and their terminal values of human capital at retirement. We derive a tractable reduced form Mincerian model of log earnings pro…les along the life cycle which is written as a linear factor model in which levels, growth and curvature of earnings pro…les are individual-speci…c. Using panel data from a single cohort of French male wage earners observed over a long span of 30 years, a random e¤ect model is estimated …rst by pseudo maximum likelihood methods. This step is followed by a simple second step …xed e¤ect method by which individual-speci…c structural parameters are estimated. This allows us to test restrictions, compute counterfactual pro…les and evaluate how earnings inequality over the life-cycle is a¤ected by changes in structural parameters. Under some conditions, even small changes in life expectancy seem to imply large changes in earnings inequality.
Dans cet article, nous examinons les données de salaires annuels, de 1976 à 1998, d'une cohorte d... more Dans cet article, nous examinons les données de salaires annuels, de 1976 à 1998, d'une cohorte d'hommes, entrés sur le marché du travail en 1976. La richesse des données nous permet d'analyser la dynamique des salaires, au cours d'une partie du cycle de vie de cette cohorte, à la di¤érence de la quasi-totalité des autres études sur ce sujet, qui doivent mêler des cohortes di¤érentes, pour avoir un nombre su¢ sant d'observations. Nous estimons, par pseudo-maximum de vraisemblance, di¤érents modèles dynamiques de panel, de type ARMA, en présence d'e¤ets individuels et de variances hétérogènes temporellement. Les résultats montrent que la variance des salaires, et donc l'inégalité, croît signi…cativement, au cours du début de cycle de vie, mais semble stagner, avant l'arrêt de la croissance des salaires. L'estimation montre que les ordres des processus sont signi…cativement plus élevés, que ceux avancés dans la littérature et sont du type ARMA(4,2). Ces estimations mettent en avant le poids de la composante permanente, liée aux e¤ets individuels, qui rend compte de 60% de la variance des résidus de salaires.
Using data on French male wage workers observed over 30 years, we estimate by random and …xed e¤e... more Using data on French male wage workers observed over 30 years, we estimate by random and …xed e¤ect methods a wage equation with pervasive heterogeneity. Individual wage pro…les are derived from a human capital investment model and described by a level, a slope and a curvature. Among others, our empirical application delivers original results on issues like the Mincer dip, and the time-varying correlations between wage growth and levels, or between initial wages and growth. Static and long-run inequality indices can easily be compared and decomposed into their multidimensional components.
We propose an original model of human capital investments after leaving school in which individua... more We propose an original model of human capital investments after leaving school in which individuals di¤er in their initial human capital obtained at school, their rate of return, their costs of human capital investments and their terminal values of human capital at retirement. We derive a tractable reduced form Mincerian model of log earnings pro…les along the life cycle which is written as a linear factor model in which levels, growth and curvature of earnings pro…les are individual-speci…c. Using panel data from a single cohort of French male wage earners observed over a long span of 30 years, a random e¤ect model is estimated …rst by pseudo maximum likelihood methods. This step is followed by a simple second step …xed e¤ect method by which individual-speci…c structural parameters are estimated. This allows us to test restrictions, compute counterfactual pro…les and evaluate how earnings inequality over the life-cycle is a¤ected by changes in structural parameters. Under some conditions, even small changes in life expectancy seem to imply large changes in earnings inequality.
Dans cet article, nous examinons les données de salaires annuels, de 1976 à 1998, d'une cohorte d... more Dans cet article, nous examinons les données de salaires annuels, de 1976 à 1998, d'une cohorte d'hommes, entrés sur le marché du travail en 1976. La richesse des données nous permet d'analyser la dynamique des salaires, au cours d'une partie du cycle de vie de cette cohorte, à la di¤érence de la quasi-totalité des autres études sur ce sujet, qui doivent mêler des cohortes di¤érentes, pour avoir un nombre su¢ sant d'observations. Nous estimons, par pseudo-maximum de vraisemblance, di¤érents modèles dynamiques de panel, de type ARMA, en présence d'e¤ets individuels et de variances hétérogènes temporellement. Les résultats montrent que la variance des salaires, et donc l'inégalité, croît signi…cativement, au cours du début de cycle de vie, mais semble stagner, avant l'arrêt de la croissance des salaires. L'estimation montre que les ordres des processus sont signi…cativement plus élevés, que ceux avancés dans la littérature et sont du type ARMA(4,2). Ces estimations mettent en avant le poids de la composante permanente, liée aux e¤ets individuels, qui rend compte de 60% de la variance des résidus de salaires.
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