The Long-Term Consequences of the Tech Bubble on Skilled Workers' Earnings

Abstract

Using matched employer-employee data from France, we uncover an ICT boom-cohort discount on the long-term earnings of the large cohort of skilled workers entering in the Information and Communication Technology (ICT) sector during the 1990s Tech Bubble. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out,relative to similar workers who started outside the ICT sector. Other moments of the wage distribution are inconsistent with selection effects. We provide suggestive evidence that these workers accumulate human capital early in their career that rapidly depreciates.