Learning and Wage Dynamics

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ID: 306419
1996
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Abstract
We develop a dynamic model of learning about worker ability in a competitive labor market. The model produces three testable implications regarding wage dynamics: (1) although the role of schooling in the labor market's inference process declines as performance observations accumulate, the estimated effect of schooling on the level of wages is independent of labor-market experience; (2) timeinvariant variables correlated with ability but unobserved by employers ( such as certain test scores) are increasingly correlated with wages as experience increases; and (3) wage residuals are a martingale. We present evidence from the NLSY that is broadly consistent with the model's predictions.
Reference Key
openalex_W3121425285 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Henry S. Farber, Robert Gibbons
Journal the quarterly journal of economics
Year 1996
DOI
10.2307/2946706
URL
https://doi.org/10.2307/2946706
Keywords Keywords not found

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