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Acquired Skills and Learned Abilities: Wage Dynamics in Internal Labor Markets

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  • NAKABAYASHI, Masaki

    ()
    (Institute of Social Science, The University of Tokyo)

Abstract

Acquired skills determine productivity and abilities determine future skills. Thus, while employers correlate wages with cross-sectional skill distribution, they learn about workersf abilities by tracking products after hiring. Since employer learning is asymmetric between inside and outside of internal labor markets, the market expects work experience and schooling to be complements for workers not promoted by current employers, and substitutes for promoted workers. The former effect hides the longitudinal learning effect in wage regressions. Therefore, (1) the employer learning effect is hidden during experience outside of internal labor markets, (2) appears within internal labor markets, but (3) attenuates with tenure.

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File URL: http://www.iss.u-tokyo.ac.jp/publishments/dpf/pdf/f-153.pdf
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Bibliographic Info

Paper provided by Institute of Social Science, The University of Tokyo in its series ISS Discussion Paper Series (series F) with number f153.

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Length: 24 pages
Date of creation: Feb 2011
Date of revision: 13 Apr 2014
Handle: RePEc:itk:issdps:f153

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Related research

Keywords: asymmetric employer learning; cross-sectional skill distribution; longitudinal employer learning; internal labor markets.;

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References

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Cited by:
  1. ZHANGALIYEVA, Aigerim & NAKABAYASHI, Masaki, 2013. "Heritage from Czar: The Russian Dual System of Schooling and Signaling," ISS Discussion Paper Series (series F) f163, Institute of Social Science, The University of Tokyo.

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