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Impact of Work Experience and Training in the Current and Previous Occupations on Earnings: Micro Evidence from the National Longitudinal Survey of Youth

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  • C Dougherty
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    Abstract

    In the empirical literature on work experience, job tenure, training and earnings, only one previous study has made a distinction between the effects of work experience in the current occupation and work experience in previous ones, and no study has made the distinction with respect to training. Yet it is reasonable to hypothesize that the distinction is important. Using data from the US National Longitudinal Survey of Youth, it is found that the returns to work experience in the current occupation with previous employers are similar to those to work experience with the current employer, and that tenure has no independent effect. Similarly it is found that the distinction between training for current and previous occupations gives better results than a distinction between training for current and previous employers. It is found that work experience, classroom training and vocational institute training for the current occupation have highly significant effects on earnings, with work experience having by far the largest absolute impact. Apart from high school vocational institute training, which actually has a significantly negative effect on the earnings of those with high cognitive test scores, the previous-occupation counterparts do not have significant effects.

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    Bibliographic Info

    Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0456.

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    Date of creation: May 2000
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    Handle: RePEc:cep:cepdps:dp0456

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    Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

    Related research

    Keywords: Earnings; work experience; training;

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    1. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(1), pages 145-76, February.
    2. Levine, Phillip B & Zimmerman, David J, 1995. "The Benefit of Additional High-School Math and Science Classes for Young Men and Women," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 13(2), pages 137-49, April.
    3. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
    4. Katharine G. Abraham & Henry S. Farber, 1986. "Job Duration, Seniority, and Earnings," NBER Working Papers 1819, National Bureau of Economic Research, Inc.
    5. Smith Freeman, 1977. "Wage Trends as Performance Displays Productive Potential: A Model and Application to Academic Early Retirement," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 419-443, Autumn.
    6. Joseph G. Altonji & Robert A. Shakotko, 1985. "Do Wages Rise With Job Seniority?," NBER Working Papers 1616, National Bureau of Economic Research, Inc.
    7. Ann P. Bartel, 1992. "Training, Wage Growth and Job Performance: Evidence From a Company Database," NBER Working Papers 4027, National Bureau of Economic Research, Inc.
    8. Joanne Salop & Steve Salop, 1976. "Self-selection and turnover in the labor market," Special Studies Papers 80, Board of Governors of the Federal Reserve System (U.S.).
    9. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-20, September.
    10. Bartel, Ann P, 1995. "Training, Wage Growth, and Job Performance: Evidence from a Company Database," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 13(3), pages 401-25, July.
    11. Kathryn L. Shaw, 1984. "A Formulation of the Earnings Function Using the Concept of Occupational Investment," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 319-340.
    12. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 13(4), pages 653-77, October.
    13. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(5), pages 972-90, October.
    14. Bishop, John, 1992. "The impact of academic competencies on wages, unemployment, and job performance," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 37(1), pages 127-194, December.
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