Long-term wage fluctuations with industry-specific human capital

Exploiting long term interindustry demand shifts, this article provides evi dence that (1) industry-level wages do not respond to industry demand condi tions; (2) at the industry level, the employment of young workers responds more to demand shifts than does the employment of experienced workers; and (3) the postdisplacement wages of displaced workers are strongly affected b y demand in their predisplacement industries. These findings are consistent with a model in which worker's investments in industry-specific skills pos e a barrier to interindustry labor mobility and wages do not respond to spo t labor market conditions.