A Test of Adverse Selection in the Market for Experienced Workers

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 22.03.2016, 12:15 - 13:30


Presentation by 

Kevin Lang (Boston University)


"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 our estimates are consistent with the prediction, the estimated effect is small. 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."

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