Estimating a Firm's Age-Productivity Profile Using the Present Value of Workers' Earnings
In hiring new workers, risk-neutral employers equate the present expected value of a worker's compensation to the present expected value of his/her productivity. Data detailing how present expected compensation varies with the age of hire, therefore, embed information about how productivity varies with age. This paper infers age-productivity profiles using data on the present expected value of earnings of new hires of a Fortune 1000 firm. For each of the five occupation/sex groups considered, productivity falls with age, with productivity exceeding earnings when young and vice versa when old. Copyright 1992, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Volume (Year): 107 (1992)
Issue (Month): 4 (November)
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