Tenure, experience, human capital and wages: A tractable equilibrium search model of wage dynamics

Jesper Bagger, Francois Fontaine, Fabien Postel-Vinay, Robin Jean-Marc

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Wage growth is decomposed into contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers. The contribution from job search to wage growth, both within- and between-job, declines over the first ten years of a career – the ‘job-shopping’ phase of a working life – after which workers settle into high-quality jobs using outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers.
Original languageEnglish
Pages (from-to)1551-1596
JournalAmerican Economic Review
Volume104
Issue number6
DOIs
Publication statusPublished - Jun 2014

Keywords / Materials (for Non-textual outputs)

  • job search
  • human capital accumulation
  • within-job wage growth
  • between-job wage growth
  • individual shocks
  • structural estimation
  • matched employer-employee data

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