Employing data for the United States taken from the 1983 wave of the Panel Study of Income Dynamics, an attempt is made to estimate tenure-earnings and tenure-productivity profiles. The underlying methodological approach is to assume that earnings of self-employed workers are identical to the value of their marginal product. Relying on a two-stage regression approach and taking selectivity bias into account, the authors find that estimated tenure-earnings and tenure-productivity profiles are found to intersect twice, after six and eighteen years of tenure, respectively. They provide an explanation for the results and also calculate the present values of the two profiles.
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Oliviera et al. (1989) studied this question.
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