The exponential growth trajectory of income described by equation (4) clearly does not present the full picture of income evolution with age. As numerous empirical observations show (e.g., Figure 1), the average income reaches its peak at some age and then starts declining. This is seen in individual income paths, for instance presented in Mincer [1974]. In our model, the effect of exponential fall is naturally achieved by setting the money earning capability?(t) to zero at some critical work experience, t=Tc.

The solution of (4) for t>Tc then becomes:

M?ij (t) = M?ij (Tc) exp[?(1/?min)( ??/L?j)(t ? Tc)]                                                                    (16)

and by substituting (12) we can write the following decaying income trajectories for t>Tc :

M?ij(t) = ?min?minS?iL?j{1 ? exp(?(1/?min)(??/L?j)Tc)]exp{?(1/?min) (??/L?j)(t? Tc)}         (17)

First term in (17) is the level of income rate attained at Tc. Second term expresses the observed exponential decay of the income rate for work experience above Tc. The exponent index ?? represents the rate of income decay that varies in time and is different from ??. It was shown in Kitov [2005a] (and also seen in Figure 1) that the exponential decay of personal  income rate above Tc results in the same relative level at the same age, when normalized to the maximum income for this calendar year. This means that the decay exponent can be obtained according to the following relationship:

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