This article tests the implications of the general human capital that (i) at the individual level, there is a negative relationship between the initial wage level and wage growth of inexperienced workers and (ii) at the market level, the ratio of the present values of wage profiles of investors and otherwise identical noninvestors equals one. We find a negative relationship between initial wage levels and wage growth, even after correcting for negative biases in existing estimates of this relationship. We also find that the ratio of the present values of rising wage profiles to flat wage profiles is generally close to one.

The need for school-to-work programs or other means of increasing early job market stability is predicated on the view that the “chaotic” nature of youth labor markets in the United States is costly because workers drift from one job to another without developing skills, behavior, or other characteristics that in turn lead to higher adult earnings. However, there is also ample evidence that workers receive positive returns to job shopping. This paper asks whether youths in unstable jobs early in their careers suffer adverse labor market consequences as adults. Its specific contribution is to account for the endogenous determination of early job stability and adult wages as outcomes of a job search/job shopping process. Labor market conditions in the early years in the labor market are used as instrumental variables for the job stability experienced during those years. The instrumental variables estimates generally point to substantial positive effects of early job stability on adult wages, in contrast to OLS estimates, which indicate little or no relationship.

Theory predicts that minimum wages will reduce employer‐provided on‐the‐job training designed to improve workers' skills on the current job, but it is ambiguous regarding training that workers obtain to qualify for a job. We estimate the effects of minimum wages on both types of training received by young workers, exploiting cross‐state variation in minimum wage increases. Much of the evidence supports the hypothesis that higher minimum wages reduce formal training to improve skills on the current job. But there is little or no evidence of offsetting increases in training undertaken to qualify for or obtain jobs.

We use microlevel data on employers and employees from a sample of establishments in four major metropolitan areas in the United States to investigate whether Affirmative Action leads to the hiring of minority or female employees who are less qualified. Our measures of qualifications include the educational attainment of the workers hired and a variety of outcome measures related to worker performance on the job. We find evidence of lower educational qualifications among women and minorities hired under Affirmative Action. However, we do not find evidence of weaker job performance among most groups of minority and female Affirmative Action hires.

We study workplace segregation in the United States using a unique matched employer-employee data set that we have created. We present measures of workplace segregation by education and language, and by race and ethnicity, and we assess the role of education- and language-related skill differentials in generating workplace segregation by race and (Hispanic) ethnicity. Our results indicate that there is considerable segregation by race, ethnicity, education, and language in the workplace. Only a tiny portion of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace can be attributed to differences in English-language proficiency. Finally, additional evidence suggests that segregation by language likely reflects complementarity among workers speaking the same language.

We examine the evidence on whether real wages decline with age among older men. While the general human capital model of wage growth over the life cycle predicts that wages will fall as workers approach the end of their career, alternative models of wage growth do not predict these wage declines. We find that in longitudinal estimates of age-wage profiles wage declines only set in for workers in their 60s. Furthermore, these longitudinal declines are at least partly due to interactions with the Social Security system. The earnings cap or other effects of Social Security appear to lead some workers to choose jobs and job characteristics associated with lower wages. Copyright 1996 by MIT Press.

Over the 1980s, there were sharp increases in the return to schooling estimated with conventional wage regressions. The authors explore whether the relationship between ability and schooling changed over this period in ways that would have increased the schooling coefficient in these regressions. Their empirical results reject the hypothesis that an increase in the bias of the schooling coefficient, due to a change in the relationship between ability and schooling, has contributed to observed increases in the return to schooling. The authors also find that the increase in the schooling return has occurred for workers with relatively high levels of academic ability. Copyright 1993 by University of Chicago Press.

We update the evidence on changes in job stability through the mid‐1990s, using recently released Current Population Survey data for 1995 that parallel earlier job tenure supplements. In the aggregate, job stability declined modestly in the first half of the 1990s. Moreover, the relatively small aggregate changes mask rather sharp declines in stability for workers with more than a few years of tenure. Nonetheless, the data available to this point do not support the conclusion that the downward shift in job stability for more tenured workers, and the more modest decline in aggregate job stability, reflect long‐term trends.

We specify and implement a test for the presence and importance of labor market networks based on residential proximity, in determining the establishments at which people work. Using matched employer-employee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work; that they are more important for minorities and the less skilled, especially among Hispanics; and that they appear to be race based.