Experience, Performance, and Earnings

James L. Medoff and Katharine Abraham ()

No 278, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This study provides direct evidence concerning the relationship between experience and performance among managerial and professional employees doing similar work in two major U. S. corporations. The facts presented indicate that while, within grade levels, there is a strong positive association between experience and relative earnings, there is either no association or a negative association between experience and relative rated performance. If we are correct that the performance ratings given to managerial and professional employees in any grade level adequately reflect those employees' relative productivity in the year of assessment, the results imply that the human capital on-the-job training model cannot explain a substantial part of the ob-served return to labor market experience.

Date: Written 1981-04
Note: LS
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Published as Medoff, James L. and Abraham, Katharine G. "Experience, Performance, and Earnings." The Quarterly Journal of Economics, Vol. XCV, No. 4, (December 19 80), pp. 703-736.

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