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On the industry experience premium and labor mobility


  • Vilalta-Bufi, Montserrat


There is evidence that experience premium differs across industries. We propose a theoretical model for explaining these differences. We assume that labor mobility brings external knowledge to the firm, which increases its productivity. We find that industry experience premium is decreasing in inter-firm mobility costs, while increasing in the learning-by-doing and the technological level of the industry. Moreover, it has a U-shape relationship with the level of learning-by-hiring, the substitutability between different types of experienced workers and the variety of knowledge in the industry. Results are consistent with the empirical findings that R&D-intensive industries have steeper wage profiles.

Suggested Citation

  • Vilalta-Bufi, Montserrat, 2010. "On the industry experience premium and labor mobility," Labour Economics, Elsevier, vol. 17(3), pages 547-555, June.
  • Handle: RePEc:eee:labeco:v:17:y:2010:i:3:p:547-555

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    References listed on IDEAS

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    Cited by:

    1. Ambra, Poggi & Piergiovanna, Natale, 2017. "Learning by hiring, network centrality and within-firm wage dispersion," Working Papers 369, University of Milano-Bicocca, Department of Economics, revised 19 Aug 2017.

    More about this item


    Labor mobility Industry experience premium Wage growth Learning-by-hiring;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General


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