A Test of Employer Learning in the Labour Market for Young Australians

Abstract:     
This paper reports a test of employer learning for a panel of young Australian men. The information contained in a test score is found to already be observed by employers at the time a worker enters the labour market. However the return to parental education is found to increase with experience, indicating that the attributes reflected in this variable are initially harder for employers to observe, and that learning indeed occurs with respect to them. When the sample is partitioned by hiring channel, these learning effects are confined to workers who were recruited through less informative channels.

Number of Pages in PDF File: 23

Keywords: employer learning, measured ability, educational sorting

JEL Classification: J24, J31

working papers series