Cohort and Experience in Life Cycle Wage Growth in Post-Transition Countries

Talk by Evgeniia Chernina as part of the Research Seminar Series of the IOS Economics Department.

This paper explores the life-cycle wage growth in ten post-transition countries. The observed cross-sectional profiles in transition countries are non-standard in that in the old ages earn comparable wages to those who have just entered the labor market. To understand this peculiarity, we decompose wage growth into the effects of experience, cohort and time employing methodology of Lagakos et al 2018. We find that with certain assumptions about the end-of-career non-investment period and human capital depreciation the experience-wage profiles refined from the effects of cohort and time have a conventional look. We argue that the cohort effect reflects the extent of human capital obsolescence due to transition shock.