Working Paper: CEPR ID: DP2077
Authors: Christian Dustmann; Costas Meghir
Abstract: This paper develops and estimates a human capital model of wage growth basedon learning by doing. Learning by doing rates are assumed to beheterogeneous and firms offer different career structures in terms of therate of acquisition of firm specific human capital. The model is estimatedusing a unique data set drawn from German administrative records andincluding a complete employment and earnings history for each worker in oursample. We find evidence of increased labour market attachments forindividuals with higher returns to experience. This has importantimplications for the estimates. The estimated returns to experience are2.7% a year. The returns to tenure are close to zero. Crucial identifyinginformation is provided by plant closures.
Keywords: wage growth; human capital; matching; job mobility
JEL Codes: J24; J31; J41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| returns to experience (Y60) | labour market attachments (J68) |
| experience (Y60) | wage growth (J31) |
| job shopping (J29) | wage growth (J31) |
| self-selection (C52) | returns to experience (Y60) |