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The Role of Seniority at U.S. Work Places: A Report on Some New Evidence

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  • James L. Medoff
  • Katharine G. Abraham

Abstract

This study discusses newly collected data concerning the role played by seniority in U.S. firms' termination and promotion decisions. The new information, based on 561 usable responses to a nation-wide survey of companies conducted by the authors, sheds light on two key questions: For what percentage of U.S. private sector employees (outside of agriculture and construction) is seniority -- per se (that is, seniority independent of current performance) rewarded in promotion decisions? For what percentage does protection against job loss grow with seniority even when current value to the firm does not? While there appear to be important differences for hourly versus salaried employees and for those covered by collective bargaining versus those not so covered, the new evidence presented strongly supports the claim that seniority independent of productivity plays a major role in the compensation and termination decisions affecting all employee groups at most U.S. workplaces.

Suggested Citation

  • James L. Medoff & Katharine G. Abraham, 1981. "The Role of Seniority at U.S. Work Places: A Report on Some New Evidence," NBER Working Papers 0618, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:0618
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    Cited by:

    1. Kai-Uwe Müller, 2010. "Employment Effects of a Sectoral Minimum Wage in Germany: Semi-Parametric Estimations from Cross-Sectional Data," Discussion Papers of DIW Berlin 1061, DIW Berlin, German Institute for Economic Research.
    2. Müller, Kai-Uwe, 2012. "Estimating the employment effects of a minimum wage from a cross-sectional wage distribution. A semi-parametric approach," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62019, Verein für Socialpolitik / German Economic Association.
    3. Joseph S. Tracy, 1986. "Seniority Rules and the Gains from Union Organization," NBER Working Papers 2039, National Bureau of Economic Research, Inc.

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