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Employer Learning And The Returns To Schooling

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  • Bauer, Thomas
  • Haisken-DeNew, John P

Abstract

We examine the dynamic role of education and experience as determinants of wages. It is hypothesized that an employee's education is an important signal to the employer initially. Over time, the returns to schooling should decrease with labour market experience and increase with initially unobserved ability, since the employer gradually obtains better information on the productivity of an employee. Replicating US studies using data from a large German panel data set (GSOEP), we find no evidence for the employer learning hypothesis for Germany. Differentiating blue-collar and white-collar workers and estimating quantile regressions, however, leads to the conclusion that employer learning takes place for blue-collar workers at the lower end of the wage distribution. We further show that information on the productivity of an employee is to a large extent private.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2445.

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Date of creation: May 2000
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Handle: RePEc:cpr:ceprdp:2445

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Related research

Keywords: Employer Learning; experience; On-The -Job Training; Returns to Education; Tenure;

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References

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  1. Pischke, J-S, 1996. "Continuous Training in Germany," Working papers 96-28, Massachusetts Institute of Technology (MIT), Department of Economics.
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  5. Bauer, Thomas K. & Haisken-DeNew, John P., 2000. "Employer Learning and the Returns to Schooling," IZA Discussion Papers 146, Institute for the Study of Labor (IZA).
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  20. Ours, J.C. van & Ridder, G., 1992. "Vacancies and recruitment of new employees," Open Access publications from Tilburg University urn:nbn:nl:ui:12-142178, Tilburg University.
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