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Wage Growth Due to Human Capital Accumulation and Job Search: A Comparison between the United States and Germany

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  • Uta Schönberg

Abstract

This paper compares the sources of wage growth of young male workers in two countries with very different labor market institutions, the United States and Germany. The author first develops a simple method for decomposing wage growth into components due to general human capital accumulation, firm-specific human capital accumulation, and job search. The empirical analysis uses data from administrative records (Germany) and the National Longitudinal Survey of Youth (United States) for cohorts entering the labor market in the late 1970s and early 1980s. Although the two countries differed substantially in mobility rates, they were similar in the sources of wage growth, with general human capital accumulation being the most important single source and job search accounting for an additional 25% or more of total wage growth. There is no evidence that returns to firm-specific human capital accumulation were higher for German apprentices than for U.S. high school dropouts or graduates.

Suggested Citation

  • Uta Schönberg, 2007. "Wage Growth Due to Human Capital Accumulation and Job Search: A Comparison between the United States and Germany," ILR Review, Cornell University, ILR School, vol. 60(4), pages 562-586, July.
    • Handle: RePEc:sae:ilrrev:v:60:y:2007:i:4:p:562-586
    DOI: 10.1177/001979390706000406
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    References listed on IDEAS

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    Cited by:

    1. Stephani, Jens, 2012. "Wage growth and career patterns of German low-wage workers," IAB-Discussion Paper 201201, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Kawaguchi, Daiji & Ueno, Yuko, 2013. "Declining long-term employment in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 28(C), pages 19-36.
    3. Thomas Zwick, 2012. "Consequences of Seniority Wages on the Employment Structure," ILR Review, Cornell University, ILR School, vol. 65(1), pages 108-125, January.
    4. Sullivan, Paul, 2010. "Empirical evidence on occupation and industry specific human capital," Labour Economics, Elsevier, vol. 17(3), pages 567-580, June.
    5. Stephani, Jens, 2013. "Does it matter where you work? : employer characteristics and the wage growth of low-wage workers and higher-wage workers," IAB-Discussion Paper 201304, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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