Job Matching and Women's Wage-Tenure Profile

Abstract

Recently, researchers have challenged the validity of the dominant theories of wage growth, claiming that the observed positive relation between wages and tenure is an artefact of omitted job match quality. In sharp contrast to the human capital theory, job match theory implies that women's wages are not directly affected by their discontinuous labour force participation. Using samples of women workers from three data sets, the authors estimate structural models of the wage-tenure relation which control directly for job match quality, and find evidence of a strong positive relation between wages and tenure.