Earnings Functions, Specific Human Capital, and Job Matching: Tenure Bias Is Negative
AbstractThis 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 InfoArticle provided by University of Chicago Press in its journal Journal of Labor Economics.
Volume (Year): 21 (2003)
Issue (Month): 4 (October)
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Web page: http://www.journals.uchicago.edu/JOLE/
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