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On the Negative Correlation Between Performance and Experience and Education

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  • Andrew Weiss
  • Henry Landau

Abstract

We consider a model where a worker's productivity must exceed some lower bound for himto satisfy the minimum qualifications for a particular job. If the worker's productivity exceeds some upper bound he is promoted. We assume the productivity of every worker increases with experience, tenure and education. This relationship differs across workers. We present distributions of workers with the property that, among workers on a particular job, education, experience, or tenure is negatively correlated with productivity; even though for any single worker on that job those demographic characteristics have strongly positive effects on productivity. The result is due to the effect of the job assignment rule on the distribution of workers on the job.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1613.

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Date of creation: Apr 1985
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Handle: RePEc:nbr:nberwo:1613

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  1. Guasch, J Luis & Weiss, Andrew, 1982. "An Equilibrium Analysis of Wage-Productivity Gaps," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 49(4), pages 485-97, October.
  2. Milton Harris & Bengt Holmstrom, 1981. "A Theory of Wage Dynamics," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 488, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Medoff, James L & Abraham, Katharine G, 1980. "Experience, Performance, and Earnings," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 95(4), pages 703-36, December.
  4. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(6), pages 1261-84, December.
  5. James L. Medoff & Katharine G. Abraham, 1981. "Are Those Paid More Really More Productive? The Case of Experience," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 186-216.
  6. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, American Economic Association, vol. 71(4), pages 606-20, September.
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Cited by:
  1. Bowman, William R. & Mehay, Stephen L., 1999. "Graduate education and employee performance: evidence from military personnel," Economics of Education Review, Elsevier, Elsevier, vol. 18(4), pages 453-463, October.

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