Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority

This paper uses longitudinal data to estimate a lower bound on the average return to job seniority among adjustment. The author finds that ten years of current job seniority raise the wage of the typical male worker in the United States by over 25 percent. This is an estimate of what the typical worker would lose if his job were to end exogenously. Overall, the evidence implies that accumulation of specific capital is an important ingredient of the typical employment relationship and of life-cycle earnings and productivity as well. Continuation of these relationships has substantial specific value for workers. Copyright 1991 by University of Chicago Press.