The economics of 'new blood'

Derek Laing, Theodore Palivos, Ping Wang

Research output: Contribution to journalArticlepeer-review

11 Scopus citations


We construct a dynamic general-equilibrium model of search and matching where public knowledge grows through time and workers accumulate a fraction of this knowledge through education/retraining. Due to search delays, the unemployment pool is populated by vintages of workers of differing productivities. Through intergenerational rivalry, the human capital of older generations is rendered obsolete relative to that of the new blood. Higher knowledge growth exacerbates intergenerational competition, thereby lowering education and growth while raising unemployment and inequality. These findings help explain wage compression/expansion and the hump-shaped wage-tenure profile across cohorts.

Original languageEnglish (US)
Pages (from-to)106-156
Number of pages51
JournalJournal of Economic Theory
Issue number1
StatePublished - Sep 1 2003
Externally publishedYes


  • Intergenerational rivalry
  • New blood
  • Vintage human capital
  • Wage distributions

ASJC Scopus subject areas

  • Economics and Econometrics


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