NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Effect of Demographic Factors on Age-Earnings Profiles

Richard B. Freeman

NBER Working Paper No. 316 (Also Reprint No. r0035)
Issued in February 1979
NBER Program(s):   LS

The age-earnings profile of male workers is significantly influenced by the age composition of the workforce. When the number of young workers increased sharply in the 1970s, the profile "twisted" against them, apparently because younger and older male workers are imperfect substitutes in production. The effect is especially marked among college graduates. By contrast, the age-earnings profile of female workers appears to be little influenced by the age composition of the female workforce, possibly because the intermittent work experience of women makes younger and older women closer substitutes in production. The dependence of the age-earnings profile on demographically induced movements along a relative demand schedule suggests that standard human capital models of the profile, which posit that earnings rise with age and experience solely as a result of individual investment behavior, are incomplete.

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Document Object Identifier (DOI): 10.3386/w0316

Published: Freeman, Richard B. "The Effect of Demographic Factors on Age-Earnings Profiles." Journal of Human Resources, Vol XIV, No. 3, (1979), pp. 289-318. citation courtesy of

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