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Employer Learning, Job Changes, and Wage Dynamics

  • Seik Kim
  • Emiko Usui

    (Nagoya University and IZA)

This paper takes a new approach to testing whether employer learning is public or private. We show that public and private learning schemes make two distinct predictions about the curvature of wage growth paths when there is a job change, because the amount of information transferred to a new employer about workers' productivity is smaller in the private learning case than in the public learning case. This prediction enables us to account for individual and job-match heterogeneity, which was not possible in previous tests. Using the National Longitudinal Survey of Youth 1979 (NLSY79), we find that learning is primarily public.

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Paper provided by University of Washington, Department of Economics in its series Working Papers with number UWEC-2012-01.

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Date of creation: Mar 2012
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Handle: RePEc:udb:wpaper:uwec-2012-01
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  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 145-76, February.
  2. Gibbons, Robert & Katz, Lawrence F., 1991. "Layoffs and Lemons," Scholarly Articles 3442782, Harvard University Department of Economics.
  3. Joshua C. Pinkston, 2006. "A Model of Asymmetric Employer Learning With Testable Implications," Working Papers 390, U.S. Bureau of Labor Statistics.
  4. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 1-35.
  5. Luojia Hu & Christopher Taber, 2008. "Displacement, asymmetric information and heterogeneous human capital," Working Paper Series WP-08-02, Federal Reserve Bank of Chicago.
  6. Derek Neal, 1998. "The Complexity of Job Mobility Among Young Men," NBER Working Papers 6662, National Bureau of Economic Research, Inc.
  7. Joshua C. Pinkston, 2006. "A Test of Screening Discrimination with Employer Learning," ILR Review, Cornell University, ILR School, vol. 59(2), pages 267-284, January.
  8. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1007-1047.
  9. Uta Schönberg, 2007. "Testing for Asymmetric Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 651-691.
  10. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 437-459.
  11. 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.
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