Do Wages Rise with Job Seniority?
Many previous studies have found a strong positive effect of job seniority (tenure) on wag es. This paper reexamines the evidence using a simple instrumental va riables scheme to deal with the fact that tenure is likely to be rela ted to unobserved individual and job characteristics that affect the wage. The main finding is that the partial effect of tenure on wages is small and that general labor market experience and job shopping ac count for most wage growth over a career. The strong cross section re lationship between tenure and wages is due primarily to heterogeneity bias. Copyright 1987 by The Review of Economic Studies Limited.
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Volume (Year): 54 (1987)
Issue (Month): 3 (July)
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