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Acquired Skills and Learned Abilities: Wage Dynamics of Blue-collar Workers in Internal Labor Markets

Workers' abilities are hidden information. Thus, when hiring, firms first use education as a proxy for abilities, and then learn about workers' abilities by tracking products. If this learning is asymmetric inside and outside major firms' internal labor markets, the market expects work experience and schooling to be complements for experience before workers gain long-term employment, which hides the learning effect. Once workers gain longterm employment, the learning effect becomes evident. Furthermore, the employer learns more quickly in the early stages of internal career, and this privately learned information could improve the efficiency of in-house training programs.

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File URL: http://www.iss.u-tokyo.ac.jp/publishments/dpf/pdf/f-153.pdf
File Function: Revised version, April 2014
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Paper provided by Institute of Social Science, The University of Tokyo in its series ISS Discussion Paper Series (series F) with number f153.

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Length: 28 pages
Date of creation: Feb 2011
Date of revision: 30 Jan 2015
Handle: RePEc:itk:issdps:f153
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  2. Vincenzo Caponi & Miana Plesca, 2009. "Post-secondary education in Canada: can ability bias explain the earnings gap between college and university graduates?," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1100-1131, August.
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  15. Mary Silles, 2007. "Sheepskin effects in the returns to education," Applied Economics Letters, Taylor & Francis Journals, vol. 15(3), pages 217-219.
  16. Maxim Poletaev & Chris Robinson, 2008. "Human Capital Specificity: Evidence from the Dictionary of Occupational Titles and Displaced Worker Surveys 1984-2000," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20083, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  17. Fernando Galindo-Rueda, 2003. "Employer Learning and Schooling-Related Statistical Discrimination in Britain," CEE Discussion Papers 0031, Centre for the Economics of Education, LSE.
  18. Michael Waldman, 1983. "Job Assignments, Signalling nad Efficiency," UCLA Economics Working Papers 286, UCLA Department of Economics.
  19. Yuji Genda & Ayako Kondo & Souichi Ohta, 2010. "Long-Term Effects of a Recession at Labor Market Entry in Japan and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
  20. John H. Tyler & Richard J. Murnane & John B. Willett, 2000. "Estimating The Labor Market Signaling Value Of The GED," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 431-468, May.
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