Key Findings Details
Technological Progress and the Earnings of Older Workers
Yuriy Gorodnichenko, John P. Laitner, Jae Song and Dmitriy Stolyarov
- We develop an earnings dynamics model that shows how technological progress affects workers’ earnings at different ages.
- Analyzing earnings data from 1950-2004, we find that earnings of younger workers rise commensurately with increases in productivity, whereas, earnings of
- 60-year old workers grow only about 90% as fast as overall technological progress.
- However, we find that earnings growth from accumulating experience for older workers more than compensates for declines in ability to benefit from improvements in technology.
- Although increases in longevity presumably encourage workers to consider longer careers, declines in earning power likely have the opposite effect, especially during eras of rapid technological change.