Do Earnings Increase with Job Seniority?

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Christopher J Ruhm, Jefferson-Pilot Excellence Professor (Creator)
The University of North Carolina at Greensboro (UNCG )
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Abstract: Cross-sectional wage regressions overstate the extent to which earnings increase with job seniority because they fail to take account of the sorting which occurs when high wage workers have lower rates of mobility. The main source of bias is a negative correlation between turnover probabilities and (unobserved) market valued individual characteristics which are transferable across firms. These results argue for the importance of theories which emphasize generally applicable individual differences and against those which focus on firm-specific attributes.

Additional Information

The Review of Economics and Statistics, Vol. 72 (1): 143-147.
Language: English
Date: 1990
Job seniority, wage regressions

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