A Test of Adverse Selection in the Market for Experienced Workers

Kevin Lang and Russell Weinstein

No 22387, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that in labor market models with adverse selection, otherwise observationally equivalent workers will experience less wage growth following a period in which they change jobs than following a period in which they do not. We find little or no evidence to support this prediction. In most specifications the coefficient has the opposite sign, sometimes statistically significantly so. When consistent with the prediction, the estimated effects are small and statistically insignificant. We consistently reject large effects in the predicted direction. We argue informally that our results are also problematic for a broader class of models of competitive labor markets.

JEL-codes: J3 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-ger and nep-lma
Note: LS
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Citations: View citations in EconPapers (3)

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