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Expected Work Experience: A New Human Capital Measure

Author

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  • Zveglich, Jr., Joseph Ernest

    (Asian Development Bank)

  • van der Meulen Rodgers, Yana

    (Rutgers University)

  • Laviña, Editha

    (Asian Development Bank)

Abstract

Work experience is a key variable in earnings function estimates and wage gap decompositions. Because data on actual work experience are rare, studies commonly use proxies, such as potential experience. But potential experience is identical for all individuals of the same age and level of education, so it ignores labor market intermittency because of childbirth and child-rearing—a critical omission when analyzing gender differences in earnings. This paper constructs a better proxy: expected work experience—the sum of the annual probabilities that an individual worked in the past. This measure can be generated using commonly available data on labor force participation rates by age and gender to gauge the probability of past work. Applying the measure to labor force survey data from the Philippines shows that conventional proxies underestimate the contribution of gender differences in work experience in explaining the gender wage gap.

Suggested Citation

  • Zveglich, Jr., Joseph Ernest & van der Meulen Rodgers, Yana & Laviña, Editha, 2019. "Expected Work Experience: A New Human Capital Measure," ADB Economics Working Paper Series 570, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0570
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    References listed on IDEAS

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    Cited by:

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    2. Maria Esther Oswald-Egg & Ursula Renold, 2019. "No Experience, No Employment: The Effect of Vocational Education and Training Work Experience on Labour Market Outcomes after Higher Education," KOF Working papers 19-469, KOF Swiss Economic Institute, ETH Zurich.
    3. Bonaccolto-Töpfer, Marina & Castagnetti, Carolina & Prümer, Stephanie, 2022. "Understanding the public-private sector wage gap in Germany: New evidence from a Fixed Effects quantile Approach∗," Economic Modelling, Elsevier, vol. 116(C).
    4. Oswald-Egg, Maria Esther & Renold, Ursula, 2021. "No experience, no employment: The effect of vocational education and training work experience on labour market outcomes after higher education," Economics of Education Review, Elsevier, vol. 80(C).
    5. Eunice S. Han, 2023. "The effect of changes in public sector bargaining laws on teacher union membership," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 133-158, March.

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    More about this item

    Keywords

    gender wage gap; labor force participation; Philippines; potential experience; wage regressions;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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