Industry-Specific Capiatl and the Wage Profile: Evidence from the NLSY and the PSID
AbstractUsing data from the NLSY (1979-1991) and from the Panel Study of Income Dynamics (PSID, 1981-1987), we seek to determine whether there is any net positive return to tenure with the current employer once we control for industry-specific capital. Using data from the PSID, Topel (JPE 1991) concluded that 10 years of seniority with an employer translated into a net return of about 25%. However, once we include total experience in the industry as an additional explanatory variable, the return to seniority vanishes almost completely when we use either OLS, GLS or IV-GLS estimation methods, although this conclusion varies somewhat according to the occupation, some occupation classes showing a negative net return to tenure and others showing a positive net return. Note also that this result holds whether the analysis is carried out at the 1-digit, 2-digit or 3-digit level. Therefore, it seems that what matters most for the wage profile in terms of human capital is not so much firm-specificity but industry-specificity. Avec les donnÃ©es du NLSY ainsi que celles du Panel Study of Income Dynamics (PSID), on cherche Ã dÃ©terminer s'il y a un rendement positif net liÃ© Ã l'anciennetÃ© dans la firme. Topel (JPE 1991) a montrÃ© avec un Ã©chantillon du PSID l'existence d'un rendement substantiel (25 % en 10 ans). Toutefois, du moment que l'on inclut l'expÃ©rience dans l'industrie courante dans l'Ã©quation de salaire (en plus de l'anciennetÃ© dans la firme ainsi que l'expÃ©rience totale de travail), l'effet d'anciennetÃ© disparaÃ®t presque complÃ¨tement, que l'on estime par simples moindres carrÃ©s gÃ©nÃ©ralisÃ©s ou par la mÃ©thode des variables instrumentales (IV-GLS), et ce, avec les deux Ã©chantillons diffÃ©rents. Â¸ noter Ã©galement que ce rÃ©sultat est robuste au degrÃ© d'agrÃ©gation des classes d'industries.
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Bibliographic InfoPaper provided by Universite de Montreal, Departement de sciences economiques in its series Cahiers de recherche with number 9508.
Length: 19 pages
Date of creation: 1995
Date of revision:
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Other versions of this item:
- Daniel Parent, 1995. "Industry-Specific Capital and the Wage Profile: Evidence from the NLSY and the PSID," CIRANO Working Papers 95s-26, CIRANO.
- Parent, D., 1995. "Industry-Specific Capiatl and the Wage Profile: Evidence from the NLSY and the PSID," Cahiers de recherche 9508, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Daniel Parent, 1995. "Industry-Specific Capital and the Wage Profile: Evidence from the NLSY and the PSID," Working Papers 729, Princeton University, Department of Economics, Industrial Relations Section..
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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NBER Working Papers
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- Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Universite de Montreal, Departement de sciences economiques.
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- Finnie, R., 1993. "Tenure Experience, and Men's and Women's Wages: Panel Estimates from the National Longitudinal Survey of Youth," Papers 9305, Laval - Recherche en Politique Economique.
- Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-60, December.
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