This paper compares the sources of wage growth of young workers in two countries with very different labor market institutions, the United States and Germany. It identifies the return to general human capital accumulation, and provides a lower and upper bound to wage growth due to firm-specific human capital accumulation and job search, respectively. Despite strikingly different mobility rates, the sources of wage growth are remarkably similar in both countries. After ten years in the labor market, roughly 50 % of wage growth can be attributed to general human capital accumulation. At least 25 % of wage growth is due to job search. There is no evidence that returns to firm-specific human capital are higher in Germany than in the US.
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Paper provided by Society for Economic Dynamics in its series 2004 Meeting Papers with number
833.
Length: Date of creation: 2004 Date of revision: Handle: RePEc:red:sed004:833
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Find related papers by JEL classification: J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity