A Test of Adverse Selection in the Market for Experienced Workers

Kevin Lang, Russell Weinstein

Research output: Working paper

Abstract

We show that in labor market models with adverse selection, otherwise observationally equivalent workers will experience less wage growth following a period in which they change jobs than following a period in which they do not. We find little or no evidence to support this prediction. In most specifications the coefficient has the opposite sign, sometimes statistically significantly so. When consistent with the prediction, the estimated effects are small and statistically insignificant. We consistently reject large effects in the predicted direction. We argue informally that our results are also problematic for a broader class of models of competitive labor markets.
Original languageEnglish (US)
Number of pages48
StatePublished - Jul 11 2016

Publication series

NameNBER Working Paper
No.w22387

Fingerprint

Labour market
Prediction
Adverse selection
Workers
Market model
Coefficients
Wage growth
Job change

Cite this

A Test of Adverse Selection in the Market for Experienced Workers. / Lang, Kevin; Weinstein, Russell.

2016. (NBER Working Paper; No. w22387).

Research output: Working paper

Lang K, Weinstein R. A Test of Adverse Selection in the Market for Experienced Workers. 2016 Jul 11. (NBER Working Paper; w22387).
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