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Tenure, Experience, Human Capital and Wages: A Tractable Equilibrium Search Model of Wage Dynamics

Author

Listed:
  • Jesper Bagger

    (RHUL - Royal Holloway [University of London])

  • François Fontaine

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Fabien Postel-Vinay

    (University of Bristol [Bristol], ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Jean-Marc Robin

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, UCL - University College of London [London])

Abstract

We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Monthly wage growth is decomposed into the contributions of human capital and job search, within and between jobs. Human capital accumulation is found to be the most important source of wage growth in early phases of workers' careers, but is soon surpassed by search-induced wage growth. Conventional measures of the returns to tenure hide substantial heterogeneity between different workers in the same firm and between similar workers in different firms.

Suggested Citation

  • Jesper Bagger & François Fontaine & Fabien Postel-Vinay & Jean-Marc Robin, 2011. "Tenure, Experience, Human Capital and Wages: A Tractable Equilibrium Search Model of Wage Dynamics," SciencePo Working papers Main hal-03461428, HAL.
    • Handle: RePEc:hal:spmain:hal-03461428
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03461428
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    References listed on IDEAS

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