Experience and Worker Flows
This paper studies a labor market where workers have incomplete information about the quality of their employment match. The model allows past experience to provide information about the quality of a new match. Allowing workers to learn from past job experience generates a decline in job finding and job separation rates with age that is consistent with patterns found in the data. To provide evidence of this learning mechanism, the model generates a prediction that wage volatility on a new job should decline with past job experience. This decline in wage volatility is documented in data from NLSY79.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
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