IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/1613.html
   My bibliography  Save this paper

On the Negative Correlation Between Performance and Experience and Education

Author

Listed:
  • Andrew Weiss
  • Henry Landau

Abstract

We consider a model where a worker's productivity must exceed some lower bound for himto satisfy the minimum qualifications for a particular job. If the worker's productivity exceeds some upper bound he is promoted. We assume the productivity of every worker increases with experience, tenure and education. This relationship differs across workers. We present distributions of workers with the property that, among workers on a particular job, education, experience, or tenure is negatively correlated with productivity; even though for any single worker on that job those demographic characteristics have strongly positive effects on productivity. The result is due to the effect of the job assignment rule on the distribution of workers on the job.

Suggested Citation

  • Andrew Weiss & Henry Landau, 1985. "On the Negative Correlation Between Performance and Experience and Education," NBER Working Papers 1613, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:1613
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w1613.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James L. Medoff & Katharine G. Abraham, 1981. "Are Those Paid More Really More Productive? The Case of Experience," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 186-216.
    2. J. Luis Guasch & Andrew Weiss, 1982. "An Equilibrium Analysis of Wage—Productivity Gaps," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(4), pages 485-497.
    3. James L. Medoff & Katharine G. Abraham, 1980. "Experience, Performance, and Earnings," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(4), pages 703-736.
    4. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    5. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    6. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-620, September.
    7. Smith Freeman, 1977. "Wage Trends as Performance Displays Productive Potential: A Model and Application to Academic Early Retirement," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 419-443, Autumn.
    8. Milton Harris & Bengt Holmstrom, 1982. "A Theory of Wage Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(3), pages 315-333.
    9. Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
    10. Milton Harris & Bengt Holmstrom, 1982. "A Theory of Wage Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(3), pages 315-333.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bowman, William R. & Mehay, Stephen L., 1999. "Graduate education and employee performance: evidence from military personnel," Economics of Education Review, Elsevier, vol. 18(4), pages 453-463, October.
    2. Adnan Bashir & Zahid Siddique, 2023. "Appraising the lifetime private economic returns of postgraduate degrees: Evidence from Pakistan," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    2. William J. Moore & Robert J. Newman & Geoffrey K. Turnbull, 2002. "The Experience-Earnings Profile: Productivity-Augmenting or Purely Contractual?," Departmental Working Papers 2002-13, Department of Economics, Louisiana State University.
    3. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    4. repec:eee:labchp:v:2:y:1986:i:c:p:789-848 is not listed on IDEAS
    5. Rupert, Peter & Zanella, Giulio, 2015. "Revisiting wage, earnings, and hours profiles," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 114-130.
    6. John G. Sessions & Nikolaos Theodoropoulos, 2014. "Tenure, Wage Profiles and Monitoring," Research in Labor Economics, in: New Analyses of Worker Well-Being, volume 38, pages 105-162, Emerald Group Publishing Limited.
    7. Andrew Weiss & Henry Landau, 1987. "Validating Hiring Criteria," NBER Working Papers 2167, National Bureau of Economic Research, Inc.
    8. Dohmen, Thomas J., 2004. "Performance, seniority, and wages: formal salary systems and individual earnings profiles," Labour Economics, Elsevier, vol. 11(6), pages 741-763, December.
    9. Ourania Karakosta & Nikos Tsakiris, 2009. "Indirect Tax Reforms and Public Goods under Imperfect Competition," University of Cyprus Working Papers in Economics 5-2009, University of Cyprus Department of Economics.
    10. William Moore & Robert Newman & Geoffrey Turnbull, 2007. "The Experience-Earnings Profile: Productivity-Augmenting or Purely Contractual? Evidence from the UK," Journal of Labor Research, Springer, vol. 28(3), pages 417-435, July.
    11. Robert Gibbons & Michael Waldman, 2006. "Enriching a Theory of Wage and Promotion Dynamics inside Firms," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 59-108, January.
    12. John Haltiwanger & Michael Waldman, 1983. "Why Bad Wokers Receive Raises," UCLA Economics Working Papers 301, UCLA Department of Economics.
    13. Smith, John, 2009. "Cognitive dissonance and the overtaking anomaly: Psychology in the principal-agent relationship," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(4), pages 684-690, August.
    14. Flabbi, Luca & Ichino, Andrea, 2001. "Productivity, seniority and wages: new evidence from personnel data," Labour Economics, Elsevier, vol. 8(3), pages 359-387, June.
    15. Michael Waldman, 1990. "A Signalling Explanation for Seniority Based Promotions and Other Labor Market Puzzles," UCLA Economics Working Papers 599, UCLA Department of Economics.
    16. Mengistae, Taye, 1999. "The relative effects of skill formation and job matching on wage growth in Ethiopia," Policy Research Working Paper Series 2104, The World Bank.
    17. John Haltiwanger & Michael Waldman, 1984. "Insurance Aspects of Labor Market Contracting: An Overview," UCLA Economics Working Papers 348, UCLA Department of Economics.
    18. Jed DeVaro & Michael Waldman, 2012. "The Signaling Role of Promotions: Further Theory and Empirical Evidence," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 91-147.
    19. Waldman, Michael, 1996. "Asymmetric learning and the wage/productivity relationship," Journal of Economic Behavior & Organization, Elsevier, vol. 31(3), pages 419-429, December.
    20. repec:eee:labchp:v:1:y:1986:i:c:p:525-602 is not listed on IDEAS
    21. Xin Jin, 2014. "The Signaling Role of Not Being Promoted: Theory and Evidence," Working Papers 0314, University of South Florida, Department of Economics.
    22. Haltiwanger, John & Waldman, Michael, 1986. "Insurance and Labor Market Contracting: An Analysis of the Capital Market Assumption," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 355-375, July.
    23. Giulio Zanella & Peter Rupert, 2010. "Revisiting Wage, Earnings, and Hours Profiles," 2010 Meeting Papers 1158, Society for Economic Dynamics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:1613. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.