Experience and schooling : substitutes or complements?

Discussion Papers No. 301, June 2001 Statistics Norway, Research Department

Torbjørn Hægeland

Experience and Schooling:

Substitutes or Complements?

Abstract:

This paper investigates whether returns to experience and seniority vary between workers with different levels of education and between different types of firms. Using a large

administrative dataset for Norwegian manufacturing, I find that more educated workers have higher experience and seniority premiums, indicating that they accumulate more human capital (both general and firm-specific) than workers with less education. Firm characteristics are also found to be important for experience and seniority premiums. Indicators of

technological change seem to be more important for returns to experience and seniority than indicators of technological level. The results suggest that workers learn from their

colleagues, and that they learn the skills that their colleagues possess.

Keywords: Wages, experience, seniority, firm and worker characteristics,linked employer- employee data.

JEL classification: J24, J31.

Acknowledgement: Thanks to seminar participants at Statistics Norway, the Frisch Centre for Economic Research, University of Tampere and Aarhus School of Business, and to Rolf Aaberge, Erling Barth, John K. Dagsvik, Erling Holmøy, Dale Jorgenson, Larry Katz, Jarle Møen and in particular Tor Jakob Klette for comments and suggestions on various drafts.

This project has received financial support from the Norwegian Research Council.

Address: Torbjørn Hægeland, Statistics Norway, Research Department. E-mail:

[email protected]

Discussion Papers comprise research papers intended for international journals or books. As a pre- print a Discussion Paper can be longer and more elaborate than a standard jour- nal article by including intermediate calculation and background material etc.

Abstracts with downloadable PDF files of

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