Employer learning, job changes, and wage dynamics

Seik Kim; Emiko Usui

doi:10.1111/ecin.12980

Employer learning, job changes, and wage dynamics

Seik Kim, Emiko Usui

Research output: Contribution to journal › Article › peer-review

Abstract

This paper takes a new approach to testing whether employer learning is public or private. We show that public and private learning schemes make two distinct predictions about the curvature of the wage growth path when a worker changes jobs, because less information about the worker's productivity is transferred to a new employer in the private learning case than in the public learning case. This prediction enables us to account for individual and job-match heterogeneity, which was not possible in previous tests. Using the National Longitudinal Survey of Youth 1979, we find that employer learning is public for high-school graduates and private for college graduates.

Original language	English
Pages (from-to)	1286-1307
Number of pages	22
Journal	Economic Inquiry
Volume	59
Issue number	3
DOIs	https://doi.org/10.1111/ecin.12980
Publication status	Published - 2021 Jul

Bibliographical note

Funding Information:
The authors thank Dan Black, Donna Ginther, Hidehiko Ichimura, Edward Lazear, Yuki Onozuka, Josh Pinkston, Dan Sasaki, Michael Waldman, and participants at the annual meetings of the American Economic Association, the Applied Microeconomics/Econometrics Conference, the European Association of Labor Economists, the Society of Economic Dynamics, the Society of Labor Economists, the Swiss Society of Economics and Statistics, and the Western Economic Association International Conference; as well as seminar participants at the Bank of Korea, Korea Development Institute, Hitotsubashi University, Okayama University, and the University of Tokyo. We thank Josh Pinkston and Audrey Light for sharing their codes for constructing the experience and tenure variables. All remaining errors are the authors’ responsibility.

Publisher Copyright:
© 2021 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International.

Keywords

employer learning
labor market information
wage dynamics

ASJC Scopus subject areas

General Business,Management and Accounting
Economics and Econometrics

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10.1111/ecin.12980

Cite this

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title = "Employer learning, job changes, and wage dynamics",

abstract = "This paper takes a new approach to testing whether employer learning is public or private. We show that public and private learning schemes make two distinct predictions about the curvature of the wage growth path when a worker changes jobs, because less information about the worker's productivity is transferred to a new employer in the private learning case than in the public learning case. This prediction enables us to account for individual and job-match heterogeneity, which was not possible in previous tests. Using the National Longitudinal Survey of Youth 1979, we find that employer learning is public for high-school graduates and private for college graduates.",

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note = "Funding Information: The authors thank Dan Black, Donna Ginther, Hidehiko Ichimura, Edward Lazear, Yuki Onozuka, Josh Pinkston, Dan Sasaki, Michael Waldman, and participants at the annual meetings of the American Economic Association, the Applied Microeconomics/Econometrics Conference, the European Association of Labor Economists, the Society of Economic Dynamics, the Society of Labor Economists, the Swiss Society of Economics and Statistics, and the Western Economic Association International Conference; as well as seminar participants at the Bank of Korea, Korea Development Institute, Hitotsubashi University, Okayama University, and the University of Tokyo. We thank Josh Pinkston and Audrey Light for sharing their codes for constructing the experience and tenure variables. All remaining errors are the authors{\textquoteright} responsibility. Publisher Copyright: {\textcopyright} 2021 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International.",

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Employer learning, job changes, and wage dynamics

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

Access to Document

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