The life cycle effect characterizes a lifetime income profile in which income

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The life cycle effect refers to the fact that income tends to rise as a worker gains maturity and experience. This is because workers typically start with lower-paying entry-level jobs and gradually move up to higher-paying positions as they gain skills and experience. Income may also increase due to promotions, salary increases, and other factors that come with seniority.

The Life Cycle Effect Characterizes a Lifetime Income Profile in Which