Multitasking and the Returns to Experience

Abstract

This chapter studies how recent changes in the organization of work, namely, the move toward multitasking, have affected the returns to work experience. In particular, I link two empirical observations about the returns to experience. First, Katz and Murphy (1992 ) showed that in the United States, while the returns to college have risen dramatically since the late 1970s, the returns to experience—the difference between the wages of older workers and those of younger workers at a point in time—for college graduates seemed to have been flat or even fallen. For high school graduates, the returns to experience increased from about 1976 to 1987. Autor, Katz, and Kearney (2008) update these results until 2005 and find that between 1987 and 2005, the returns to experience for college graduates did not change much, while the returns to experience for high school graduates rose through 1995 and then fell over the next 10 years. The second empirical observation that I study in this chapter is that for those entering the labor market in the late 1960s and early 1970s, wage growth over the first 10 years in the labor market was lower for college graduates than for high school graduates, while for those who entered in the late 1980s, wage growth increased over the first 10 years for college graduates so that it was almost as high as that of high school graduates (Aaronson 2001).