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Tenure, experience, human capital and wages: a tractable equilibrium search model of wage dynamics

  • Jesper Bagger

    (Institute for Fiscal Studies)

  • Francois Fontaine

    (Institute for Fiscal Studies)

  • Jean-Marc Robin

    ()

    (Institute for Fiscal Studies and cemmap and Sciences Po)

We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Career wage growth is decomposed into the contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers, and both human capital accumulation and job search contribute to the observed concavity of wage-experience pro files. The contribution from job search to wage growth, both within- and between-job, declines over the fi rst ten years of a career- the `job-shopping' phase of a working life - after which workers settle into high-quality jobs and use outside off ers to generate gradual wage increases, thus reaping the benefi ts from competition between employers.

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File URL: http://www.cemmap.ac.uk/wps/cwp121414.pdf
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Paper provided by Centre for Microdata Methods and Practice, Institute for Fiscal Studies in its series CeMMAP working papers with number CWP12/14.

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Date of creation: 14 Mar 2014
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Handle: RePEc:ifs:cemmap:12/14
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  1. Christian Bontemps & Jean-Marc Robin & Gérard J. Van den Berg, 2000. "Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation," Post-Print hal-00357755, HAL.
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