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Author: Omer, Valeriu Altai
Resulting in 1 citation.
1. Omer, Valeriu Altai
Wage Growth, Search And Experience: Theory And Evidence
Ph.D. Dissertation, University of Minnesota, 2005. DAI-A 66/12, Jun 2006.
Cohort(s): NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): High School Completion/Graduates; Labor Economics; Mobility; Unemployment; Wage Growth

Permission to reprint the abstract has not been received from the publisher.

The early careers of male high school graduates in the US are characterized by high mobility and significant wage growth, facts documented extensively in the literature. Using a sample of male high school graduates from the National Longitudinal Survey of Youth (NLSY), I document that about 44% of individual's increase in wages during the first ten years of his career occurs during job transitions, while the remaining 56% occurs within jobs. Motivated by this observation, this thesis addresses the question how much of the wage growth during an individual's early career is due to on-the-job search. To this end, a search model with on-the-job search and exogenous accumulation of general and job-specific experience is estimated using the simulated method of moments. Taking the estimated model parameters as a benchmark, the contribution of search on the job to wage growth is measured as the percentage decrease in wage growth resulting from shutting down worker's access to job offers while employed. The estimated wage growth due to on-the-job search is 60%, which is 14% larger than the observed wage growth between jobs. The difference between the two is due to the presence of job-specific experience. Specifically, the model estimates that about one fourth of a worker's experience accumulated during the first 5 years of his career consists of job-specific experience. I analyze two types of labor market policies that affect worker mobility and wage growth. Firstly, endowing the worker with more general experience prior to his career enhances labor mobility without a permanent effect on wages. Moreover, if the worker expects instead job-specific training on each job held during his early career, his job mobility increases and the effect on wages is permanent. Secondly, numerical simulations indicate that unemployment benefits conditional on worker's accumulated experience are welfare improving.
Bibliography Citation
Omer, Valeriu Altai. Wage Growth, Search And Experience: Theory And Evidence. Ph.D. Dissertation, University of Minnesota, 2005. DAI-A 66/12, Jun 2006..