description- – This paper explores whether within job and between job wage growth is lower for less-educated workers.While a simple model of heterogeneous learning ability predicts that individuals with low learning ability will have flatter wage profiles,this prediction has been largely ignored in the recent welfare reform debates. The key econometric problem in estimating returns to tenure and experience is that wages depend on the unobservable job match component, which is endogenous. We depart from the standard method for dealing with this problem in one important way.We show that this alternative implies that wages grow with the number of previous successful job matches. In our empirical work we show that this source of between job wage growth is large. Furthermore, we show that this source of wage growth,as well as the standard returns to tenure and experience,are substantially smaller for the least educated.
subjectcollectiondatepublishercreatorformat description- – This paper explores the wage and job dynamics of less-skilled workers by estimating a structural model in which agents choose among jobs that differ in initial wage and wage growth. The model also formalizes the intuitive notion that some of these jobs offer"stepping stones"to better jobs. The estimated model assumes that job offers consist of three attributes: an initial wage, an expected wage growth, and an indicator of the distribution from which future offers will come. We derive the conditions under which agents accept these offers and the effect of involuntary terminations on the acceptance decision. This model shows that the probability of leaving an employer depends both on the slope and intercept of the current and offered jobs and the probability of gaining access to the dominant wage offer distribution. We use the SIPP to estimate this model, which allows us to recover parameters of the wage offer distributions and the probability that a job is a stepping stone job. Our empirical work indicates that wage offer distributions vary systematically with the slope and intercept of wages in the current job and that there is a non-zero probability of being offered a stepping stone job.
subjectcollectiondatepublishercreatorformat subjectcollectiondatepublishercreatorformat description- – This paper asks whether wage subsidies encourages participants to move into jobs with greater wage growth. We provide an analytical framework that identifies the key causal links between earnings subsidies and both within-and between-job wage growth. This framework highlights the importance of the form of the subsidy on the decision about the type of job to accept. We find that the subsidy will lead participants to place a higher value on jobs with wage growth if the relationship between pre-and post-subsidy earnings is convex, but the subsidy is predicted to have no effect on within-job wage growth if the transformation is linear. The subsidy is also predicted to affect between-job wage growth by increasing on-the- job search and altering the reservation wage. We use this framework to analyze the effects of the Canadian Self-Sufficiency Project experiment. We find that this subsidy did not affect within-job wage growth but did increase wage gains between jobs.
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