Abstract
Joshua C.Pinkston (2003) "A
Model of Asymmetric Employer Learning with Testable Implications."
This paper develops and tests a unique model of asymmetric employer learning. The previous
literature on asymmetric learning assumes that a worker's employer is
perfectly informed while outside firms possess only public information.
This paper relaxes that assumption, allowing firms to profitably bid for
employed workers under conditions that were not profitable in previous
models. The model in this paper is the first in the literature to predict
either wage growth without promotions or mobility between firms without
firm- or match-specific productivity. The bidding through which firms
compete for a worker produces a sequence of wages that converges to the
current employer's conditional expectation of the worker's productivity.
This convergence of wages allows the model to be tested using an extension
of existing work on employer learning. Wage regressions estimated on a
sample of men from the NLSY produce strong evidence of asymmetric
learning.
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