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Earnings Functions, Specific Human Capital, and Job Matching: Tenure Bias Is Negative


  • Margaret Stevens

    (Oxford University and Lincoln College, Oxford)


This article investigates the hypothesis that when measures of specific human capital (such as job tenure) are included in earnings functions, there may be a sample selection bias because of job-matching effectsbecause workers with high unobserved match quality receive and accept high wage offers. We develop a model for wage offers in a labor market characterized by both specific human capital and job matching. The model provides a theoretical basis for empirical earnings functions containing specific capital, and it demonstrates that sample selection bias reduces the estimated return to specific human capital and tenure.

Suggested Citation

  • Margaret Stevens, 2003. "Earnings Functions, Specific Human Capital, and Job Matching: Tenure Bias Is Negative," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 783-806, October.
  • Handle: RePEc:ucp:jlabec:v:21:y:2003:i:4:p:783-806

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    References listed on IDEAS

    1. Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Social Choice: A Mean Voter Theorem," Econometrica, Econometric Society, vol. 59(1), pages 1-23, January.
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    Cited by:

    1. Cerqueti, Roy & Coppier, Raffaella, 2011. "Economic growth, corruption and tax evasion," Economic Modelling, Elsevier, vol. 28(1-2), pages 489-500, January.
    2. repec:eee:jbrese:v:79:y:2017:i:c:p:198-211 is not listed on IDEAS
    3. Barmby, Tim & Bryson, Alex & Eberth, Barbara, 2012. "Human capital, matching and job satisfaction," Economics Letters, Elsevier, vol. 117(3), pages 548-551.
    4. Sabrina Di Addario & Eleonora Patacchini, 2006. "Is there an urban wage premium in Italy?," Temi di discussione (Economic working papers) 570, Bank of Italy, Economic Research and International Relations Area.
    5. Ham, Roger & Junankar, Pramod N. (Raja) & Wells, Robert, 2009. "Occupational Choice: Personality Matters," IZA Discussion Papers 4105, Institute for the Study of Labor (IZA).
    6. Di Addario, Sabrina & Patacchini, Eleonora, 2008. "Wages and the City. Evidence from Italy," Labour Economics, Elsevier, vol. 15(5), pages 1040-1061, October.
    7. Frederiksen, Anders & Lange, Fabian & Kriechel, Ben, 2017. "Subjective performance evaluations and employee careers," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 408-429.
    8. Mary Gregory & Sara Connolly, 2007. "Part-time Employment Can Be a Life-time Setback for Earnings: A Study of British Women 1975-2001," Economics Series Working Papers 358, University of Oxford, Department of Economics.
    9. Barmby, Tim & Eberth, Barbara, 2008. "Worker turnover and job matching--Implications for estimating the returns to tenure," Economics Letters, Elsevier, vol. 101(2), pages 137-139, November.
    10. By Barbara Mueller & Jürg Schweri, 2015. "How specific is apprenticeship training? Evidence from inter-firm and occupational mobility after graduation," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 1057-1077.
    11. Sabrina Di Addario & Eleonora Patacchini, 2005. "Wages and the City. The Italian case," Economics Series Working Papers 243, University of Oxford, Department of Economics.

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