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Reexamining the Wage, Tenure and Experience Relationship

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  • Williams, Nicolas

Abstract

Despite considerable empirical research, a debate still rages about the relative importance of tenure and experience in determining wages given the existence of unobserved heterogeneity. Using a data set well suited to this problem, the author finds after correcting for unobserved heterogeneity that tenure increases wages only in the first several years of employment. The accumulated effect of general labor-market experience increases wages substantially over the career. This evidence suggests that specific human capital accumulation is relatively less important than some might believe. This result is robust to different estimation techniques that have been suggested in the literature. Copyright 1991 by MIT Press.

Suggested Citation

  • Williams, Nicolas, 1991. "Reexamining the Wage, Tenure and Experience Relationship," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 512-517, August.
    • Handle: RePEc:tpr:restat:v:73:y:1991:i:3:p:512-17
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    Citations

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    Cited by:

    1. Maciej, Szelewicki & Tyrowicz, Joanna, 2009. "Labour Market Racial Discrimination in South Africa Revisited," MPRA Paper 16440, University Library of Munich, Germany.
    2. Cornelia Luchsinger & Rafael Lalive & Jörg Wild, 2003. "Do Wages Rise with Job Seniority? The Swiss Case," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(II), pages 207-229, June.
    3. Maria Esther Oswald-Egg & Ursula Renold, 2019. "No Experience, No Employment: The Effect of Vocational Education and Training Work Experience on Labour Market Outcomes after Higher Education," KOF Working papers 19-469, KOF Swiss Economic Institute, ETH Zurich.
    4. Williams, Nicolas, 2009. "Seniority, experience, and wages in the UK," Labour Economics, Elsevier, vol. 16(3), pages 272-283, June.
    5. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    6. Degeorge, Francois & Jenter, Dirk & Moel, Alberto & Tufano, Peter, 2004. "Selling company shares to reluctant employees: France Telecom's experience," Journal of Financial Economics, Elsevier, vol. 71(1), pages 169-202, January.
    7. Oswald-Egg, Maria Esther & Renold, Ursula, 2021. "No experience, no employment: The effect of vocational education and training work experience on labour market outcomes after higher education," Economics of Education Review, Elsevier, vol. 80(C).
    8. World Bank, 2007. "Chile - County Gender Assessment : Expanding Women's Work Choices to Enhance Chile's Economic Potential," World Bank Publications - Reports 7639, The World Bank Group.
    9. Leontaridi, Rannia M., 2002. "Career, experience and returns to human capital: is the dual labour market hypothesis relevant for the UK?," Research in Economics, Elsevier, vol. 56(4), pages 399-426, December.
    10. Michal Myck & Gillian Paull, 2001. "The role of employment experience in explaining the gender wage gap," IFS Working Papers W01/18, Institute for Fiscal Studies.
    11. Reamonn Lydon & Ian Walker, 2005. "Welfare to work, wages and wage growth," Fiscal Studies, Institute for Fiscal Studies, vol. 26(3), pages 335-370, September.
    12. Cingano, Federico, 2003. "Returns to specific skills in industrial districts," Labour Economics, Elsevier, vol. 10(2), pages 149-164, April.
    13. Joseph G. Altonji & Nicolas Williams, 1992. "The Effects of Labor Market Experience, Job Seniority, and Job Mobility on Wage Growth," NBER Working Papers 4133, National Bureau of Economic Research, Inc.

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