The Effect of Job Tenure on Wage Offers
A wage offer can be either acceptable or unacceptable to a worker, but in cross-sectional and panel data only acceptable wage offers are observed. An OLS wage equ ation will not reveal how job tenure affects wage offers but rather w ill reveal how tenure affects acceptable wage offers. By jointly mode ling the firm's determination of the wage offer and the worker's deci sion to accept or reject the offer, the authors are able to estimate the effect of job tenure on wage offers consistently. In contrast to the usual OLS results, they find that job tenure has no statistically significant effect on wage offers. Copyright 1987 by University of Chicago Press.
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