International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss


The Effects of Technological Change on Experience-Earning Profiles with Endogenous Industry Choice
Xueda Song

This study examines how technological change affects experience-earning profiles, while correcting for self-on industry through a simultaneous estimation of industry choice and wage determination. Using data from the Current Population Survey, I find evidence for hierarchical sorting between high-tech and low-tech industries for workers with at least some college education. No evidence for self-selection on industry, however, is found for those with less education. I also find that experience-earning profiles are lower and steeper in high-tech industries than in low-tech industries for those with Bachelor’s degree or higher. Thus, highly-educated workers have more learning opportunities and experience faster productivity growth in high-tech industries than in low-tech industries. Highly-educated workers, however, also suffer faster human capital obsolescence due to rapid technological change in high-tech industries than in low-tech industries. Differences in experience-earning profiles between the two sectors for the other three education groups are less pronounced.

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