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Tenure-based Wage Setting

Author

Listed:
  • Hart, Robert A.

    (University of Stirling)

  • Ritchie, Felix

    (University of the West of England, Bristol)

Abstract

We provide empirical support for the contention that within-job wage growth relates purely to job-specific performance and that returns to general experience are assessed at the point of job change. Using the British New Earnings Survey panel data we identify job changes that take place both within and between firms. We follow a cohort of 6778 male workers (born between 1958 and 1962) for the period 1975 to 1994 and estimate their within-job wage changes by allowing returns to vary over jobs. Between job changes are observed for individuals changing jobs in 1994. This work leads us to question the meaningfulness of attempts to separate returns to general and firm-specific human capital.

Suggested Citation

  • Hart, Robert A. & Ritchie, Felix, 1999. "Tenure-based Wage Setting," IZA Discussion Papers 47, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp47
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    References listed on IDEAS

    as
    1. 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.
    2. Christian Dustmann & Costas Meghir, 2005. "Wages, Experience and Seniority," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 77-108.
    3. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-229, April.
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    Cited by:

    1. Alison Booth & Mark L. Bryan, 2006. "Training, Minimum Wages and the Earnings Distribution," CEPR Discussion Papers 537, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. Gilles Saint Paul, 2000. "Flexibility vs. rigidity: Does Spain have the worst of both worlds?," Economics Working Papers 450, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Josef Zweimueller & Rudolf Winter-Ebmer, "undated". "Firm-specific Training: Consequences for Job Mobility," IEW - Working Papers 037, Institute for Empirical Research in Economics - University of Zurich.
    4. Booth, Alison L. & Bryan, Mark L., 2002. "Who Pays for General Training? New Evidence for British Men and Women," IZA Discussion Papers 486, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Tenure; experience; earnings; panel data;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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