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On the industry experience premium and labor mobility

  • Montserrat Vilalta-Bufi

    (Universitat de Barcelona)

There is evidence that experience premium differs across industries. We propose a theoretical model for explaining these differences. We assume that labor mobility brings external knowledge to the firm, which increases its productivity. We find that industry experience premium is decreasing in the inter-firm mobility costs, while increasing in the learning-by-doing and the technological level of the industry. Moreover, it has a U-shape relationship with the level of learning-by-hiring, the substitutability between different types of experienced workers and the variety of knowledge in the industry. Results are consistent with the empirical findings that R&D-intensive industries have steeper wage profiles.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 208.

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Length: 0 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:bar:bedcje:2008208
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