Events at CERGE-EI

Byeongju Jeong, Ph.D.

Author: Byeongju Jeong

Abstract: I present a model in which young workers choose among career tracks (i.e., pick the first task and the associated distribution of subsequent tasks among tasks ordered according to talent demands).  Rising talent rewards motivate young workers to choose a more talent-demanding task, raise the failure rate (i.e., the probability of the realized talent being lower than the exit threshold), and polarize the income distribution.  I conjecture that rising talent rewards are technologically associated with a narrowing range of subsequent tasks, adding to the riskiness of optimal career tracks.  Rising talent rewards also raise the share of young workers subject to binding minimum current-income constraints, raising the dispersion of tasks among young workers.  I explore whether education may alleviate the current-income constraints.  The model speaks to the rising stratification of careers among young workers and the rising polarization of the residual labor income distribution (i.e., the labor income distribution controlling for observable worker characteristics like education and age).

Full Text:  “Talent Rewards, Talent Uncertainty, and Career Tracks”