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Ability and Employer Learning: Evidence from the Economist Labor Market

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  • Paul Oyer

Abstract

I study the human capital development and firm-worker matching processes for PhD economists. This group is useful for this purpose because the types of jobs they hold can be easily categorized and they have an observable productivity measure (that is, publications.) I derive a two-period model to motivate an empirical analysis of economist job matching upon graduation, matching ten years later, and productivity in the first ten years. I show that matching to a higher ranked institution affects productivity. I present evidence that employers improve their estimates of economists' ability early in their career in a way that determines longer-term job placement. I also find that the initial placement of economists to institutions does not show much evidence of systematic misallocation along observable characteristics.

Suggested Citation

  • Paul Oyer, 2007. "Ability and Employer Learning: Evidence from the Economist Labor Market," NBER Working Papers 12989, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12989
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    References listed on IDEAS

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    1. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
    2. Paul Oyer, 2006. "The Making of an Investment Banker: Macroeconomic Shocks, Career Choice, and Lifetime Income," NBER Working Papers 12059, National Bureau of Economic Research, Inc.
    3. MacDonald, Glenn M, 1982. "A Market Equilibrium Theory of Job Assignment and Sequential Accumulation of Information," American Economic Review, American Economic Association, vol. 72(5), pages 1038-1055, December.
    4. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1007-1047.
    5. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-1120, December.
    6. Edward P Lazear, 1998. "Hiring Risky Workers," Palgrave Macmillan Books, in: Isao Ohashi & Toshiaki Tachibanaki (ed.), Internal Labour Markets, Incentives and Employment, chapter 7, pages 143-158, Palgrave Macmillan.
    7. 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.
    8. Yonmin Chen & Terra Mckinnish, 2005. "Do Economics Departments Search Optimally in Faculty Recruiting?," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 676-688, July.
    9. Robert Gibbons & Lawrence F. Katz & Thomas Lemieux & Daniel Parent, 2005. "Comparative Advantage, Learning, and Sectoral Wage Determination," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 681-724, October.
    10. Kahn, Charles & Huberman, Gur, 1988. "Two-sided Uncertainty and "Up-or-Out" Contracts," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 423-444, October.
    11. Paul Oyer, 2006. "Initial Labor Market Conditions and Long-Term Outcomes for Economists," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 143-160, Summer.
    12. Carmichael, H Lorne, 1988. "Incentives in Academics: Why Is There Tenure?," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 453-472, June.
    13. Farber, Henry S., 1999. "Mobility and stability: The dynamics of job change in labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 37, pages 2439-2483, Elsevier.
    14. Valerie Smeets & Frédèric warzynski & Tom Coupé, 2006. "Does the Academic Labor Market Initially Allocate New Graduates Efficiently?," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 161-172, Summer.
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    Cited by:

    1. Nakabayashi, Masaki, 2011. "Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s," MPRA Paper 30597, University Library of Munich, Germany.
    2. Lawson, Cornelia & Geuna, Aldo & Ana Fernández-Zubieta & Toselli, Manuel & Kataishi, Rodrigo, 2015. "International Careers of Researchers in Biomedical Sciences: A Comparison of the US and the UK," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201514, University of Turin.
    3. NAKABAYASHI, Masaki, 2011. "Acquired Skills and Learned Abilities: Wage Dynamics of Blue-collar Workers in Internal Labor Markets," ISS Discussion Paper Series (series F) f153, Institute of Social Science, The University of Tokyo, revised Apr 2012.
    4. Timothy Perri, 2012. "Between the penthouse and the outhouse: the sorting of economics professors," Applied Economics Letters, Taylor & Francis Journals, vol. 19(18), pages 1899-1902, December.
    5. Catherine Haeck & Frank Verboven, 2012. "The Internal Economics of a University: Evidence from Personnel Data," Journal of Labor Economics, University of Chicago Press, vol. 30(3), pages 591-626.
    6. Conley, John P. & Onder, Ali Sina & Torgler, Benno, 2012. "Are all High-Skilled Cohorts Created Equal? Unemployment, Gender, and Research Productivity," Economy and Society 142954, Fondazione Eni Enrico Mattei (FEEM).
    7. John P. Conley & Ali Sina Önder & Benno Torgler, 2012. "Are all High-Skilled Cohorts Created Equal? Unemployment, Gender, and Research Productivity," Working Papers 2012.86, Fondazione Eni Enrico Mattei.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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