Firm-specific Human Capital Accumulation: Evidence from Brazil

Tiago Pires, Arek Szydlowski () and Shuai Zhao

No 20/09, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: We introduce firm-specific returns to experience and tenure into a standard two-way fixed effects model and provide new evidence on heterogeneity of returns to experience and tenure across firms using the administrative matched employer-employee data from Brazil over the years 1999-2014. We find that 1) assuming that employer-employee match quality is determined by firm-specific wage premia and firm-specific returns to experience and seniority, the average return to 5 years of seniority is equal to 14.7%, 2) returns to tenure are not strongly related to firm wage premia (i.e.firm FEs), 3) returns to experience are strongly negatively correlated with firm wage premia, 4) the relationship between firm wage premium and return to experience is stronger for \blue collar" firms.

Date: 2020-09
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