Competition in Labor Markets Shapes Wage Seniority Premiums.
The article explores how experienced workers who stay with the same employer can earn higher wages, even if they are not more productive than new workers. The researchers created a model of the job market where switching jobs is costly for experienced workers, and new workers have different skills. They found that the wage increase for experienced workers depends on how competitive the job market is for new and experienced workers. This means that even if new workers are more skilled, experienced workers can still earn more if the job market is more competitive for new workers.