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Tenure, experience, human capital and wages: a tractable equilibrium search model of wage dynamics

Authors: Jesper Bagger , Francois Fontaine and Jean-Marc Robin
Date: 14 March 2014
Type: cemmap Working Paper, CWP12/14
DOI: 10.1920/wp.cem.2014.1214


We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Career wage growth is decomposed into the contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers, and both human capital accumulation and job search contribute to the observed concavity of wage-experience pro files. The contribution from job search to wage growth, both within- and between-job, declines over the fi rst ten years of a career- the `job-shopping' phase of a working life - after which workers settle into high-quality jobs and use outside off ers to generate gradual wage increases, thus reaping the benefi ts from competition between employers.

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Now published:
Jesper Bagger, Francois Fontaine, Fabien Postel-Vinay and Jean-Marc Robin June 2015, Tenure, experience, human capital, and wages: a tractable equilibrium search model of wage dynamics, Journal article, American Economic Association

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