We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Wage growth is decomposed into contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers. The contribution from job search to wage growth, both within- and between-job, declines over the first ten years of a career – the ‘job-shopping’ phase of a working life – after which workers settle into high-quality jobs using outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers.
Find the working paper here.
Authors
Research Fellow Sciences Po and University College London
Jean-Marc is a Research Fellow of the IFS and a Professor of Economics at Sciences Po, Paris, and University College London.
CPP Co-Director, IFS Research Director
Fabien is an IFS Research Director and a Professor of Economics at UCL. His work’s focus is on labour markets.
Jesper Bagger
Francois Fontaine
Journal article details
- DOI
- 10.1257/aer.104.6.1551
- Publisher
- American Economic Association
- Issue
- June 2015
Suggested citation
Bagger, J et al. (2015). 'Tenure, experience, human capital, and wages: a tractable equilibrium search model of wage dynamics' (2015)
More from IFS
Understand this issue
Empty defence spending promises are a shot in the dark
29 April 2024
Public investment: what you need to know
25 April 2024
The £600 billion problem awaiting the next government
25 April 2024
Policy analysis
Recent trends in and the outlook for health-related benefits
19 April 2024
4.2 million working-age people now claiming health-related benefits, could rise by 30% by the end of the decade
19 April 2024
Progression of nurses within the NHS
12 April 2024
Academic research
The employment and distributional impacts of nationwide minimum wage changes
10 April 2024
Willingness to pay for improved public education and public healthcare systems: the role of income mobility prospects
14 March 2024
Unfunded mandates and taxation
14 March 2024