July 13, 2021
with N. Bianchi
Using data from multiple high-income countries, this paper shows that the wages of older workers have been growing faster than those of younger workers. This increasing age wage gap primarily stemmed from a change in the relative positions of younger and older workers in the wage distribution. This finding is compatible with a growing gap in the quantity of wage-enhancing factors — such as experience or job titles — owned by younger and older workers, but not with an increase in these factors’ prices. The main mechanism is the existence of negative worker-to-worker spillovers that harmed the careers of younger workers.