Personalforschung an Hochschulen - Rainer Hampp Verlag

448 Personalforschung an Hochschulen
2. A Brief Review of the Theories
The most recognized explanation of the wage-tenure profile is the theory of human
capital. Generally, the theory suggests that the accumulation of skills and knowledge
leads to an increase in productivity which, in turn leads to an increase in wages
over the lifetime of a worker. The rising productivity is either due to firm-specific or
general human capital aggregation. If on the one hand the investment in human capital
is general it is productive in raising productivity at every firm by the same amount.
Thus, the wage mimics productivity. If on the other hand the investment was made in
specific human capital, the worker’s output will only increase in the present firm because
it is useless in any other. As such, a worker’s wage profile is initially higher
and after a certain (training) period lower than his productivity.
Alternatively, the theory of incentive wage, which suggests that backloading
payment is used as a worker discipline device. Workers are undercompensated early
in their career but are motivated to work hard in order to stay with the firm and reap
their due compensation that comes with longer tenure. This results because holding
out payment until late in the individual’s lifetime alters the worker’s incentives to reduce
his effort on the job. According to theory, incentive wages are most likely to be
found where monitoring costs are high. As implicated above, human capital and incentive
wage theories agree on the fact that earnings rise with additional tenure, but
they differ in whether productivity rises faster or slower than does the wage, assuming
performance rises at all.
The matching story proposes that due to information asymmetries recently hired
workers earn less than observationally similar employees whose performance is
known to the employer. As the employer learns a worker’s „real“ productivity, he either
lays him off or pays him a wage that reflects his true productivity. As the percentage
of workers whose productivity is unknown to the employer decends over
time, wages rise with tenure. Whether the effect of tenure on wages is substantial was
questioned by several economists due to the problem of unobserved heterogeneity
across individuals and across job matches in panel settings. Briefly, they stress that
this problem causes upward biased estimates of the tenure coefficient in a traditional
OLS specification, because of the likely correlation between tenure and unobserved
individual and job match specific effects. In order to remedy this distortion it is necessary
to purge the estimation via a procedure that employs a specific instrumental
variable for tenure that is correlated with it, but has actually nothing to do with the error
term. As a result, the estimation will produce consistent returns to tenure. Testing
these competing theories empirically is difficult, because most often real productivity
measures are simply not available. The analysis accounts for this setback.
3. Data, Models and Empirical Findings
A unique database from a single professional sports industry, the National Basketball
Association (NBA) is used to test the superiority of one model over others in
explaining basketball players upward sloping age-earnings profiles. The data set is