The Wage Premium for Job Seniority During the 1980s and Early 1990s

Posted: 24 Mar 1999

See all articles by Dave E. Marcotte

Dave E. Marcotte

University of Maryland Baltimore County; IZA Institute of Labor Economics


In this paper I use Panel Study of Income Dynamics (PSID) data to study whether the rewards for job tenure have fallen since the early 1980s. An upward sloping seniority-wage profile is generally thought to be an important dimension of compensation during a career. However, recent interest in the incidence of lay-offs and changes in the structure of firms gives rise to the possibility that employment contracts are less often being structured to reward tenure, or that such contracts are more difficult to honor. Using a two-stage estimator to attempt to control unmeasured individual and job match effects on wages, I find some evidence that the wage premium paid to senior workers has declined moderately. However, I find that these results are mildly sensitive to alternative methods of handling the relatively noisy PSID tenure data.

JEL Classification: J31

Suggested Citation

Marcotte, Dave E., The Wage Premium for Job Seniority During the 1980s and Early 1990s. Available at SSRN:

Dave E. Marcotte (Contact Author)

University of Maryland Baltimore County ( email )

1000 Hilltop Circle
Policy Sciences Graduate Program 621 Administration Building
Baltimore, MD 21250
United States
410-455-1455 (Phone)
410-455-1172 (Fax)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics