Born to Run Behind? Persistent Relative Age Effects on Earnings

The relative age effect is an established phenomenon in the literature, but estimates of its strength and duration vary. In order to study the economic magnitude of the effect, we use Norwegian registry data to investigate how birth month affects earnings throughout the full course of life for all Norwegian males born during the period 1940-1949. We examine earnings from 20 to 68 years of age. Our findings suggest that the youngest within a cohort have a relative age disadvantage in early career years that translates into a relative age advantage during late career years. When observing non-discounted life earnings, we find that the two effects cancel out and leave no relative age imprint on life earnings.