Evolution of technology causes human capital to become obsolete. We study this phenomenon in an overlapping generations setting, assuming it is hard to predict how technology will evolve, and that older workers find updating uneconomic. Among our results is the proposition that (under certain...

The evolution of technology causes human capital to become obsolete. We study this phenomenon in an overlapping generations setting, assuming that technology evolves stochastically and that older workers find updating uneconomic. Experience and learning by doing may offer the old some income...