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How Worker Productivity and Wages Grow with Tenure and Experience: The Firm Perspective / Andrew Caplin, Minjoon Lee, Søren Leth-Petersen, Johan Saeverud, Matthew D. Shapiro.
- Format:
- Book
- Author/Creator:
- Caplin, Andrew.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w30342.
- NBER working paper series no. w30342
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2022.
- Summary:
- How worker productivity evolves with tenure and experience is central to economics, shaping, for example, life-cycle earnings and the losses from involuntary job separation. Yet, worker-level productivity is hard to identify from observational data. This paper introduces direct measurement of worker productivity in a firm survey designed to separate the role of on-the-job tenure from total experience in determining productivity growth. A key innovation is to elicit what managers know about the productivity of their workers. Several findings emerge concerning the initial period on the job. (1) On-the-job productivity growth exceeds wage growth, consistent with wages not being allocative period-by-period. (2) Previous experience is a substitute, but a far less than perfect one, for on-the-job tenure. (3) There is substantial heterogeneity across jobs in the extent to which previous experience substitutes for tenure. The survey makes use of administrative data to construct a representative sample of firms, check for selective non-response, validate survey measures with administrative measures, and calibrate parameters not measured in the survey.
- Notes:
- Print version record
- August 2022.
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