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Individual Wage Growth: The Effects Of Industry Experience And Firm Tenure, Michele Battisti
Individual Wage Growth: The Effects Of Industry Experience And Firm Tenure, Michele Battisti
Michele Battisti
This paper estimates the wage and mobility effects of experience in an industry. It uses a simultaneous equation model that accounts for the potential endogeneity of job tenure and industry experience in the wage determination process and allows for nonlinearities in the effects of interest. The empirical model is estimated using a large panel of Italian workers for the years 1986-2004. Results show that wage returns to industry experience are much larger than wage returns to job seniority. The hypotheses of exogeneity of job seniority and industry experience can be tested and are rejected.