(with Nicola Bianchi)

Using data from multiple high-income countries, this paper shows that the growing gap in the wages of older and younger workers primarily stems from a change in their relative positions in the wage distribution. This finding is compatible with a growing gap in the accumulation of wage-enhancing factors between younger and older workers, not with an increase in the prices of these factors. Additional results corroborate the hypothesis that a larger supply of older workers with progressively longer working lives harmed the careers of younger workers. Unlike what other explanations predict, a large portion of the gap increase happened within firms with constraints in adding higher-ranked positions. Moreover, the rank loss experienced by younger workers stemmed from both an immediate loss at entry and lower post-entry growth. Finally, the gap increase did not depend on changes in the workforce composition.