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Earnings Functions, Specific Human Capital, and Job Matching: Tenure Bias Is Negative

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  • Margaret Stevens

    (Oxford University and Lincoln College, Oxford)

Abstract

This article investigates the hypothesis that when measures of specific human capital (such as job tenure) are included in earnings functions, there may be a sample selection bias because of job-matching effectsbecause workers with high unobserved match quality receive and accept high wage offers. We develop a model for wage offers in a labor market characterized by both specific human capital and job matching. The model provides a theoretical basis for empirical earnings functions containing specific capital, and it demonstrates that sample selection bias reduces the estimated return to specific human capital and tenure.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 21 (2003)
Issue (Month): 4 (October)
Pages: 783-806

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Handle: RePEc:ucp:jlabec:v:21:y:2003:i:4:p:783-806

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Web page: http://www.journals.uchicago.edu/JOLE/

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Cited by:
  1. Sabrina Di Addario & Eleonora Patacchini, 2007. "Wages and the City. Evidence from Italy," Development Working Papers 231, Centro Studi Luca d\'Agliano, University of Milano.
  2. Sabrina Di Addario & Eleonora Patacchini, 2005. "Wages and the City. The Italian case," Economics Series Working Papers 243, University of Oxford, Department of Economics.
  3. Sabrina Di Addario & Eleonora Patacchini, 2006. "Is there an urban wage premium in Italy?," Temi di discussione (Economic working papers) 570, Bank of Italy, Economic Research and International Relations Area.
  4. Connolly, Sara & Gregory, Mary, 2007. "Part-time Employment Can Be a Life-time Setback for Earnings: A Study of British Women 1975–2001," IZA Discussion Papers 3101, Institute for the Study of Labor (IZA).
  5. Cerqueti, Roy & Coppier, Raffaella, 2011. "Economic growth, corruption and tax evasion," Economic Modelling, Elsevier, vol. 28(1-2), pages 489-500, January.
  6. Tim Barmby & Alex Bryson & Barbara Eberth, 2012. "Human Capital, Matching and Job Satisfaction," CEP Discussion Papers dp1151, Centre for Economic Performance, LSE.
  7. Ham, Roger & Junankar, Pramod N. (Raja) & Wells, Robert, 2009. "Occupational Choice: Personality Matters," IZA Discussion Papers 4105, Institute for the Study of Labor (IZA).

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