Despite indications that interpersonal interactions are important for understanding individual labor-market outcomes and have become more important over the last decades, there is little analysis by economists. This paper shows that interpersonal interactions are important determinants of...

Individuals choose to invest in general skills through education or technology-specific skills by working on the job. Technological progress, which occurs randomly across sectors, depreciates technology-specific skills - thus increasing the return to education and generating a precautionary...

This paper offers an explanation for the evolution of wage inequality within and between industries and education groups over the past several decades. The model is based on the disproportionate depreciation of technology-specific skills versus general skills due to technological progress, which...