Early Starters Versus Late Beginners

Journal of Political Economy, Vol. 107, No. 4, August 1999

Posted: 18 Nov 1999

See all articles by Pierre-Andre Chiappori

Pierre-Andre Chiappori

Columbia University - Graduate School of Arts and Sciences, Department of Economics

Bernard Salanie

Columbia University - Graduate School of Arts and Sciences - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Julie Valentin

Universite Paris 1

Abstract

We consider a model of wage formation characterized by two features: learning and downward rigidity. We show that wages should exhibit a late-beginner property: when one controls for the wage at date t, the wage at date t + 1 should be negatively correlated with the wage at date t - 1. We test this property on a sample of about 1,000 executives of a French state-owned firm whose careers we observe for 15 years. This organization exhibits the features that characterize internal labor markets; in particular, careers consist of sequences of discrete promotions, a fact that generates specific econometric problems. The results confirm the prediction.

JEL Classification: J31

Suggested Citation

Chiappori, Pierre-Andre and Salanie, Bernard and Valentin, Julie, Early Starters Versus Late Beginners. Journal of Political Economy, Vol. 107, No. 4, August 1999, Available at SSRN: https://ssrn.com/abstract=169392

Pierre-Andre Chiappori (Contact Author)

Columbia University - Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

Bernard Salanie

Columbia University - Graduate School of Arts and Sciences - Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Julie Valentin

Universite Paris 1 ( email )

106/112 boulevard de l'Hopital
Paris Cedex 13, 75647
France

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