The Effect of Match Quality and Specific Experience on Career Decisions and Wage Growth

Abstract:     
This paper constructs and estimates a career decision model where individuals search for both career matching and employer matching to understand wage growth and career mobility using the NLSY79. It departs from previous papers in that career mobility decisions and participation decisions are explicitly modeled. I find substantial returns to career-specific experience. However, college graduates' wage grows little through career-match upgrading, which results in a lower incidence of career changes than high school graduates. The finding suggests that college graduates learn about their suitable careers before they enter a labor market.

Keywords: Specific Human Capital, Occupational Choice, Matching

JEL Classifications: J24, J31, J41, J62

Working Paper Series