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On the industry experience premium and labor mobility

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Author Info
Montserrat Vilalta-Bufi (Universitat de Barcelona)

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Abstract

There is evidence that experience premium differs across industries. We propose a theoretical model for explaining these differences. We assume that labor mobility brings external knowledge to the firm, which increases its productivity. We find that industry experience premium is decreasing in the inter-firm mobility costs, while increasing in the learning-by-doing and the technological level of the industry. Moreover, it has a U-shape relationship with the level of learning-by-hiring, the substitutability between different types of experienced workers and the variety of knowledge in the industry. Results are consistent with the empirical findings that R&D-intensive industries have steeper wage profiles.

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Publisher Info
Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 208.

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Date of creation: 2008
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Handle: RePEc:bar:bedcje:2008208

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es
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Find related papers by JEL classification:
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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  3. Parent, Daniel, 2000. "Industry-Specific Capital and the Wage Profile: Evidence from the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 306-23, April. [Downloadable!] (restricted)
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  8. Helen Connolly & Peter Gottschalk, 2006. "Differences in Wage Growth by Education Level: Do Less-Educated Workers Gain Less from Work Experience?," IZA Discussion Papers 2331, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Giovanni Peri, 2005. "Determinants of Knowledge Flows and Their Effect on Innovation," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 308-322, 06. [Downloadable!] (restricted)
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  11. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  12. Barth, Erling, 1997. "Firm-Specific Seniority and Wages," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 495-506, July. [Downloadable!] (restricted)
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  14. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9. [Downloadable!] (restricted)
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