Individual Wage Growth: The Role of Industry Experience

31 Pages Posted: 9 Dec 2015

See all articles by Michele Battisti

Michele Battisti

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: January 2016

Abstract

This paper focuses on the effect of experience within an industry on wages. I use a correlated random effects simultaneous equation model that allows individual and match heterogeneity to affect wages, job tenure, and industry experience. I estimate my model separately for men and women using a large panel of young Italian workers for the years 1986–2004. Results show that wage returns to industry experience are much higher than wage returns to job seniority. The hypotheses of exogeneity of job seniority and industry experience in the wage equation are rejected: high‐wage workers and high‐wage matches last longer.

Suggested Citation

Battisti, Michele, Individual Wage Growth: The Role of Industry Experience (January 2016). Industrial Relations: A Journal of Economy and Society, Vol. 55, Issue 1, pp. 40-70, 2016. Available at SSRN: https://ssrn.com/abstract=2700962 or http://dx.doi.org/10.1111/irel.12125

Michele Battisti (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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