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Do Wages Rise with Job Seniority? A Reassessment

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  • Joseph G. Altonji
  • Nicolas Williams

Abstract

We provide new estimates of the return to job seniority using data similar to that used by Abraham and Farber (1987), Altonji and Shakotko (1987) and Topel (1991) as well as a new PSID sample. Topel's use of a wage and a tenure that refer to different years, his use of the Current Population Survey to detrend the PSID, and differences between Altonji and Shakotko's estimator and Topel's estimator explain the fact that Topel obtains much larger estimates. The evidence from the data used by AS and Topel points to an effect of ten years of tenure on the log wage equal to .11, which is above AS's preferred estimate of .066 but far below Topel's estimate. However, this estimate is probably biased upward by the wage measure used in all three studies. We also obtain a modest estimate of the return to seniority using data for 1983-1991.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6010.

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Date of creation: Apr 1997
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Publication status: published as Industrial and Labor Relations Review, Vol. 58, no. 3, April 2005, pp. 370-397
Handle: RePEc:nbr:nberwo:6010

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