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Interfirm Mobility, Wages, and the Returns to Seniority and Experience in the U.S.


Moshe Buchinsky


University of California, Los Angeles (UCLA) - Department of Economics; National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); National Bureau of Economic Research (NBER)

Denis Fougere


National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); National Center for Scientific Research (CNRS); Institute for the Study of Labor (IZA)

Francis Kramarz


National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)

Rusty Tchernis


Georgia State University - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

March 2008

IZA Discussion Paper No. 1521
CAEPR Working Paper No. 2008-006

Abstract:     
Much of the research in labor economics during the 1980s and the early 1990s was devoted to the analysis of changes in the wage structure across many of the world's economies. Only recently, has research turned to the analysis of mobility in its various guises. From the life cycle perspective, decreased wage mobility and increased job instability, makes the phenomenon of increasing wage inequality more severe than it appears to be at first sight. In general, workers' wages may change through two channels: (a) return to their firm-specific human capital (seniority); or (b) inter-firm wage mobility. Our theoretical model gives rise to three equations: (1) a participation equation; (2) a wage equation; and (3) an interfirm mobility equation. In this model the wage equation is estimated simultaneously with the two decision equations. We use the Panel Study of Income Dynamics (PSID) to estimate the model for three education groups. Our main finding is that returns to seniority are quite high for all education groups. On the other hand, the returns to experience appear to be similar to those previously found in the literature.

Number of Pages in PDF File: 63

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Date posted: February 23, 2005  

Suggested Citation

Buchinsky, Moshe and Fougere, Denis and Kramarz, Francis and Tchernis, Rusty, Interfirm Mobility, Wages, and the Returns to Seniority and Experience in the U.S. (March 2008). IZA Discussion Paper No. 1521; CAEPR Working Paper No. 2008-006. Available at SSRN: http://ssrn.com/abstract=671022

Contact Information

Moshe Buchinsky (Contact Author)
University of California, Los Angeles (UCLA) - Department of Economics ( email )
Box 951477
Los Angeles, CA 90095-1477
United States
National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)
15 Boulevard Gabriel Peri
92245 Malakoff Cedex, 1 92245
France
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Denis Fougere
National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )
15, Boulevard Adolphie PINARD
92245 Malakoff Cedex
France
+33 1 4117 7713 (Phone)
+33 1 4117 7634 (Fax)
National Center for Scientific Research (CNRS)
75013 Paris, 94204
France
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Francis Kramarz
National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )
15 Boulevard Gabriel Peri
92245 Malakoff Cedex
France
+33 1 4117 6033 (Phone)
+33 1 4117 6046 (Fax)
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Rusty Tchernis
Georgia State University - Department of Economics ( email )
P.O. Box 3992
Atlanta, GA 30302-3992
United States
HOME PAGE: http://www2.gsu.edu/~ecort

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA) ( email )
P.O. Box 7240
Bonn, D-53072
Germany
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