Training, Tenure, and Productivity

42 Pages Posted: 1 Mar 2001 Last revised: 15 Feb 2002

See all articles by Frank R. Lichtenberg

Frank R. Lichtenberg

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: May 1981

Abstract

There is substantial evidence from the literature on individual wage determination that length of service to the firm is an important determinant of earnings and thus of labor productivity, holding constant employee at-tributes such as age, sex, and education. Earnings growth associated with increased tenure is usually interpreted as a reflection of firm-specific on-the-job training (OJT). In this paper a model of producer technology consistent with the hypothesis of firm-specific OJT is formulated and estimated. Empirical implementation of the model on data for U.S. manufacturing provides the basis for estimation of the marginal productivity of workers classified by length of service to the firm, i.e., of the tenure-productivity profile. The parameter estimates also enable us to determine the effect of recent changes in the tenure distribution (due to changes in labor turnover behavior) on manufacturing productivity performance.

Suggested Citation

Lichtenberg, Frank R., Training, Tenure, and Productivity (May 1981). NBER Working Paper No. w0671, Available at SSRN: https://ssrn.com/abstract=262085

Frank R. Lichtenberg (Contact Author)

Columbia Business School - Finance and Economics ( email )

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