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Firm-Specific Seniority and Wages


  • Barth, Erling


This article studies the relationship between seniority and wages. Micro data with more than one observation from each firm are utilized to single out the seniority effect on wages arising within firms from the total seniority wage effect. The results show that the seniority effect arises within firms, but do not support the human capital explanation of the seniority wage profile. Employees with high levels of firm-specific on-the-job training requirements have less steep wage profiles. The results give some support to the theory of delayed compensation as piece rate workers have negligible returns to seniority. Copyright 1997 by University of Chicago Press.

Suggested Citation

  • Barth, Erling, 1997. "Firm-Specific Seniority and Wages," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 495-506, July.
  • Handle: RePEc:ucp:jlabec:v:15:y:1997:i:3:p:495-506

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    References listed on IDEAS

    1. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-620, September.
    2. Levine, David I, 1993. "Worth Waiting For? Delayed Compensation, Training, and Turnover in the United States and Japan," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 724-752, October.
    3. Bernhardt, Dan & Timmis, Gerald C, 1990. "Multiperiod Wage Contracts and Productivity Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(4), pages 529-563, October.
    4. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    5. Brown, James N, 1989. "Why Do Wages Increase with Tenure? On-the-Job Training and Life-Cycle Wage Growth Observed within Firms," American Economic Review, American Economic Association, vol. 79(5), pages 971-991, December.
    6. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 437-459.
    7. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    8. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
    9. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    10. Hutchens, Robert M, 1989. "Seniority, Wages and Productivity: A Turbulent Decade," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 49-64, Fall.
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