Journal of Labor Economics Vol. 21 No. 4 2003
Earnings Functions, Specific Human Capital, and Job Matching: Tenure Bias Is Negative
Abstract
This article investigates the hypothesis that when measures of specific human capital (such as job tenure) are included in earnings functions, there may be a sample selection bias because of job‐matching effects—because workers with high unobserved match quality receive and accept high wage offers. We develop a model for wage offers in a labor market characterized by both specific human capital and job matching. The model provides a theoretical basis for empirical earnings functions containing specific capital, and it demonstrates that sample selection bias reduces the estimated return to specific human capital and tenure.
- DOI
- 10.1086/376958
- Volume
- 21
- Issue
- 4
- Pages
- 783-805
- Language
- en
- Sources
- openalex crossref