Industry-Specific Capital and the Wage Profile: Evidence from the NLSY and the PSID

Daniel Parent ()

No 729, Working Papers from Princeton University, Department of Economics, Industrial Relations Section.

Abstract: Using data from the NLSY (1979-1991) and from the PSID (1981-1987), l seek to determine whether there is any net positive return to tenure with the current employer once we control for industry-specific capital. Using data from the PSID, Topel (JPE 1991) concluded that 10 years of seniority with an employer translated into a net return of about 25%. However, once 1 include total experience in the industry as an additional explanatory variable, the return to seniority is markedly reduced when 1 use GLS while it virtually disappears when I use IV-GLS, although this conclusion varies somewhat according to the occupation category. Note also that this result holds whether the analysis is carried out at the 1-digit or 3-digit levels. Therefore, it seems that what matters most for the wage profile in terms of human capital is not so much firm-specificity but industry-specificity. In other words, for these two samples of workers, the wage formation process appears to be quite competitive.

Keywords: tenure effect; industry-specific capital (search for similar items in EconPapers)
JEL-codes: B29 B3 (search for similar items in EconPapers)
Date: 1995-11
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Citations: View citations in EconPapers (22)

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Related works:
Working Paper: Industry-Specific Capital and the Wage Profile: Evidence from the NLSY and the PSID (1995)
Working Paper: Industry-Specific Capiatl and the Wage Profile: Evidence from the NLSY and the PSID (1995)
Working Paper: Industry-Specific Capiatl and the Wage Profile: Evidence from the NLSY and the PSID (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:indrel:350

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