Why Do Wages Increase with Tenure? On-the-Job Training and Life-Cycle Wage Growth Observed within Firms

James N Brown

American Economic Review, 1989, vol. 79, issue 5, 971-91

Abstract: Empirical results in this paper indicate that firm-specific wage growth occurs almost exclusively during periods of on-the-job training. This finding suggests that within-firm wage growth is mainly determined by contemporaneous productivity growth. The results provide no evidence that contractual considerations are an important source of firm-specific wage growth. Copyright 1989 by American Economic Association.

Date: 1989
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