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Cohort Effects and Returns to Seniority in France

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  • David N. Margolis

Abstract

We examine empirically returns to seniority in France and estimate cohort effects in both firm specific compensation policies and returns to job seniority. We demonstrate the biases in several estimators of returns to seniority and show that allowing firm specific compensation policies and returns to seniority to vary by entry cohort uncovers patterns of variance within firm and within cohort in estimated intercepts and slopes that can be explained by no single theory. Nous examinons les rendements d'ancienneté en France et nous estimons les effets de cohorte, à la fois dans la politique de rémunération de l'entreprise et dans son rendement d'ancienneté. Nous soulignons les biais présents dans plusieurs estimateurs de rendement d'ancienneté et nous montrons que la flexibilité introduite par l'estimation des effets de cohorte nous permet de découvrir des variations à travers les cohortes et à travers les entreprises qui ne sont pas cohérentes avec aucune des théories de rémunération trouvées dans la littérature.

Suggested Citation

  • David N. Margolis, 1995. "Cohort Effects and Returns to Seniority in France," CIRANO Working Papers 95s-46, CIRANO.
  • Handle: RePEc:cir:cirwor:95s-46
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    File URL: http://www.cirano.qc.ca/files/publications/95s-46.pdf
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    References listed on IDEAS

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    1. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    2. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    3. MacLeod, W Bentley & Malcomson, James M, 1988. "Reputation and Hierarchy in Dynamic Models of Employment," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 832-854, August.
    4. 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.
    5. 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.
    6. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.
    7. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
    8. Milton Harris & Bengt Holmstrom, 1981. "A Theory of Wage Dynamics," Discussion Papers 488, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    9. Joanne Salop & Steven Salop, 1976. "Self-Selection and Turnover in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 619-627.
    10. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, June.
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    Citations

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    Cited by:

    1. Zwick, Thomas, 2011. "Seniority wages and establishment characteristics," Labour Economics, Elsevier, vol. 18(6), pages 853-861.
    2. Stephen Bazen, 2001. "Youth and Earnings Mobility: the Case of France in a comparative Framework," LoWER Working Papers wp3, AIAS, Amsterdam Institute for Advanced Labour Studies.
    3. Marc Gurgand & David Margolis, 2005. "Does work pay in France? Monetary incentives and the guaranteed minimum income," Cahiers de la Maison des Sciences Economiques bla05002, Université Panthéon-Sorbonne (Paris 1).
    4. David Margolis, 2006. "Should employment authorities worry about mergers and acquisitions?," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 5(2), pages 167-194, August.
    5. Marc Gurgand & David Margolis, 2001. "RMI et revenus du travail : une évaluation des gains financiers à l'emploi," Économie et Statistique, Programme National Persée, vol. 346(1), pages 103-122.
    6. Givord, Pauline & Maurin, Eric, 2003. "Job Tenure, Wages and Technology: A Reassessment Using Matched Worker-Firm Panel Data," CEPR Discussion Papers 4147, C.E.P.R. Discussion Papers.
    7. Williams, Nicolas, 2009. "Seniority, experience, and wages in the UK," Labour Economics, Elsevier, vol. 16(3), pages 272-283, June.
    8. Amigues, Jean-Pierre & Favard, Pascal & Gaudet, Gerard & Moreaux, Michel, 1998. "On the Optimal Order of Natural Resource Use When the Capacity of the Inexhaustible Substitute Is Limited," Journal of Economic Theory, Elsevier, vol. 80(1), pages 153-170, May.
    9. Gurgand, Marc & Margolis, David N., 2008. "Does work pay in France? Monetary incentives, hours constraints, and the guaranteed minimum income," Journal of Public Economics, Elsevier, vol. 92(7), pages 1669-1697, July.
    10. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    11. Dachraoui, K. & Dionne, G., 1999. "Capital Structures and Compensation Policies," Papers 99-28, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
    12. Zwick, Thomas, 2009. "Why Pay Seniority Wages?," ZEW Discussion Papers 09-005, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. repec:eee:labchp:v:3:y:1999:i:pb:p:2629-2710 is not listed on IDEAS
    14. Torbjørn Hægeland, 2001. "Experience and Schooling: Substitutes or Complements?," Discussion Papers 301, Statistics Norway, Research Department.

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