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Please use this identifier to cite or link to this item: http://arks.princeton.edu/ark:/88435/dsp01p5547r37j
 Title: Industry-Specific Capital and the Wage Profile: Evidence from the NLSY and the PSID Authors: Parent, Daniel Keywords: tenure effectindustry-specific capital Issue Date: 1-Nov-1995 Citation: Journal of Labor Economics, Vol. 18, No. 2, April 2000 Series/Report no.: Working Papers (Princeton University. Industrial Relations Section) ; 350 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 l 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 l 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. URI: http://arks.princeton.edu/ark:/88435/dsp01p5547r37j Related resource: http://links.jstor.org/sici?sici=0734-306X%28200004%2918%3A2%3C306%3AICATWP%3E2.0.CO%3B2-9 Appears in Collections: IRS Working Papers

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