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Do Earnings Increase with Job Seniority?

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  • Ruhm, Christopher J

Abstract

Cross-sectional wage regressions overstate the extent to which earnings increase with job seniority because they fail to take account of the sorting which occurs when high wage workers have lower rates of mobility. The main source of bias is a negative correlation between turnover probabilities and (unobserved) market valued individual characteristics which are transferable across firms. These results argue for the importance of theories which emphasize generally applicable individual differences and against those which focus on firm-specific attributes. Copyright 1990 by MIT Press.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics & Statistics.

Volume (Year): 72 (1990)
Issue (Month): 1 (February)
Pages: 143-47

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Handle: RePEc:tpr:restat:v:72:y:1990:i:1:p:143-47

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Web page: http://mitpress.mit.edu/journals/

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Cited by:
  1. Burda, Michael C. & Mertens, Antje, 2001. "Estimating wage losses of displaced workers in Germany," Labour Economics, Elsevier, vol. 8(1), pages 15-41, January.
  2. Arnaud Lefranc, 2003. "Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United States," William Davidson Institute Working Papers Series 2003-614, William Davidson Institute at the University of Michigan.
  3. Kenneth A. Counch, 2003. "Job Matching and Wage Growth in the U.S. and Germany," Working papers 2003-10, University of Connecticut, Department of Economics.
  4. Abbring, J.H. & Berg, G. van den & Gautier, P.A. & Lomwel, A.G.C. van & Ours, J.C. van & Ruhm, C.J., 1998. "Displaced Workers in The United States and The Netherlands," Discussion Paper 1998-96, Tilburg University, Center for Economic Research.
  5. Schwalbach, Joachim & Brenner, Steffen, 2001. "Managerqualität und Unternehmensgröße," SFB 373 Discussion Papers 2001,18, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  6. Peter Kuhn & Arthur Sweetman, . "Vulnerable Seniors: Unions, Tenure and Wages Following Permanent Job Loss," Canadian International Labour Network Working Papers 20, McMaster University.
  7. Zimmermann, Klaus F., 1998. "German Job Mobility and Wages," IZA Discussion Papers 4, Institute for the Study of Labor (IZA).

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