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Individual Wage Growth: The Role of Industry Experience

  • Michele Battisti

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This paper focuses on the effect of experience within an industry on wages. I use a correlated random effects simultaneous equation model that allows individual and match heterogeneity to affect wages, job tenure and industry experience. I estimate my model separately for men and women using a large panel of young Italian workers for the years 1986–2004. Results show that wage returns to industry experience are much higher than wage returns to job seniority. The hypotheses of exogeneity of job seniority and industry experience in the wage equation are rejected: high-wage workers and highwage matches last longer.

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Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 152.

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Date of creation: 2013
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Handle: RePEc:ces:ifowps:_152
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  17. Martin Schindler, 2009. "The Italian Labor Market; Recent Trends, Institutions, and Reform Options," IMF Working Papers 09/47, International Monetary Fund.
  18. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  19. Roberto Leombruni & Roberto Quaranta, 2011. "La codifica di settore in WHIP. Problemi correnti e studio di un algoritmo di ricostruzione della codifica Ateco 2002," LABORatorio R. Revelli Whip Technical Reports 02, LABORatorio R. Revelli, Centre for Employment Studies.
  20. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
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