Wage Growth and Worker Observability

When hiring new entrants into the labor market, firms make their decisions based on limited<br />information about worker ability. An estimation of ability must be gleaned from observable factors such as a worker\'s education level, GPA and interview performance. While some firms conduct further testing, it remains that an accurate evaluation of worker ability at the time of hiring is very difficult to achieve. Evidence suggests that much of a firm\'s evaluation of worker ability takes place after a worker has been hired. The purpose of this paper is to provide a thorough analysis of wage growth and a firm\'s ability to observe its workers\' productivity.<br /><br />I regress a Mincerian wage equation using data from the March 2009 Supplement of the Consumer Population Survey merged with additional industry data gathered from the Bureau of Labor Statistics. The coefficient of worker experience interacted with various measures of worker observability is used to provide an indication of the importance of worker observability in the growth of wages. I examine four potential measures of worker observability: firm size, occupation, industry, and worker-manager ratio. The results indicate a positive relationship between worker observability and wage growth when using firm size as a measure of observability.

Name thesis:degree_name

Ph. D.

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Economics

Department dc:contributor.department

Economics, Science

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2013

Author dc:creator

• Hallmann, Paul Christopher C.

Chair dc:contributor.committeechair

• Salehi-Isfahani, Djavad

Committee members dc:contributor.committeemember

• Ge, Suqin
• Yang, Zhou
• Ashley, Richard A.

• Labor
• Wage Growth

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Dc Identifier Other

vt_gsexam:342

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/50411