The relationship between wage growth and wage levels
AbstractWe estimate the covariance between the permanent component of wages and a random coefficient on experience in models both with potential experience and with actual experience. Actual experience is allowed to be arbitrarily correlated with both the permanent component of wages and the random component on experience. We find no evidence that workers of higher ability experience faster wage growth. Our point estimates suggest that a worker with a one standard deviation higher level of permanent ability would have a return to annual potential experience that is 0.61 of a percentage point lower. The analogous point estimate for actual experience is 0.87 of a point lower. Contrary to the popular perception, wage growth among low-skill workers appears to be at least as high as that for a medium-skilled worker. Copyright © 2009 John Wiley & Sons, Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.
Volume (Year): 24 (2009)
Issue (Month): 6 ()
Contact details of provider:
Web page: http://www.interscience.wiley.com/jpages/0883-7252/
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Abowd, John M & Card, David, 1989.
"On the Covariance Structure of Earnings and Hours Changes,"
Econometric Society, vol. 57(2), pages 411-45, March.
- John M. Abowd & David Card, 1986. "On the Covariance Structure of Earnings and Hours Changes," NBER Working Papers 1832, National Bureau of Economic Research, Inc.
- Jagadeesh Gokhale & Laurence J. Kotlikoff, 1999.
"The impact of Social Security and other factors on the distribution of wealth,"
9913, Federal Reserve Bank of Cleveland.
- Jagadeesh Gokhale & Laurence J. Kotlikoff, 2002. "The Impact of Social Security and Other Factors on the Distribution of Wealth," NBER Chapters, in: The Distributional Aspects of Social Security and Social Security Reform, pages 85-114 National Bureau of Economic Research, Inc.
- Gokhale, J. & Kotlikoff, L.J., 1999. "The Impact of Social Security and Other Factors on the Distribution of Wealth," Papers 9913, London School of Economics - Centre for Labour Economics.
- Baker, Michael, 1997. "Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 338-75, April.
- Heaton, John & Lucas, Deborah J, 1996.
"Evaluating the Effects of Incomplete Markets on Risk Sharing and Asset Pricing,"
Journal of Political Economy,
University of Chicago Press, vol. 104(3), pages 443-87, June.
- John Heaton & Deborah Lucas, 1993. "Evaluating the Effects of Incomplete Markets on Risk Sharing and Asset Pricing," NBER Working Papers 4249, National Bureau of Economic Research, Inc.
- Eric French & Bhashkar Mazumder & Christopher Taber, 2005. "The changing pattern of wage growth for low skilled workers," Working Paper Series WP-05-24, Federal Reserve Bank of Chicago.
- Feldstein, Martin & Liebman, Jeffrey B., 2002.
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324
- Joshua D. Angrist & Guido W. Imbens, 1995.
"Identification and Estimation of Local Average Treatment Effects,"
NBER Technical Working Papers
0118, National Bureau of Economic Research, Inc.
- Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
- Helen Connolly & Peter T. Gottschalk, 2001. "Returns to Tenure and Experience Revisited -- Do Less Educated Workers Gain Less from Work Experience?," JCPR Working Papers 224, Northwestern University/University of Chicago Joint Center for Poverty Research.
- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
- Stephen V. Cameron & James J. Heckman, 1991.
"The Nonequivalence of High School Equivalents,"
NBER Working Papers
3804, National Bureau of Economic Research, Inc.
- Paul Bingley & Lorenzo Cappellari & Niels Westergård-Nielsen, 2011.
"Flexicurity, Wage Dynamics and Inequality over the Life-Cycle,"
CESifo Working Paper Series
3561, CESifo Group Munich.
- Paul Bingley & Lorenzo Cappellari & Niels Westergård-Nielsen, 2012. "Flexicurity, wage dynamics and inequality over the life-cycle," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
- Lorenzo Cappellari, 2011. "Flexicurity, wage dynamics and inequality over the life-cycle," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0064, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
- Paul Bingley & Lorenzo Cappellari & Niels Westergård‐Nielsen, 2013.
"Unemployment Insurance, Wage Dynamics and Inequality Over the Life Cycle,"
Royal Economic Society, vol. 0, pages 341-372, 05.
- Bingley, Paul & Cappellari, Lorenzo & Westergård-Nielsen, Niels C., 2013. "Unemployment Insurance, Wage Dynamics and Inequality over the Life Cycle," IZA Discussion Papers 7128, Institute for the Study of Labor (IZA).
- Xi Chen & Bertrand M. Koebel, 2013. "Fixed cost, variable cost, markups and returns to scale," Working Papers of BETA 2013-13, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.