@techreport{Buhai2006Tenure,
abstract = {This paper provides a new way of analyzing tenure profiles in wages, by modelling
simultaneously the evolution of wages and the distribution of tenures. We develop a
theoretical model based on efficient bargaining, where both log outside wage and log wage in
the current job follow a random walk, as found empirically. This setting allows the
application of real option theory. We derive the efficient separation rule. The model fits the
observed distribution of job tenures well. Since we observe outside wages only at job start and
job separation, our empirical analysis of within job wage growth is based on expected wage
growth conditional on the outside wages at both dates. Our modelling allows testing of the
efficient bargaining hypothesis. The model is estimated on the PSID.},
author = {I. Sebastian Buhai and Coen N. Teulings},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {C51; C52; J63; 330; random productivity growth; efficient bargaining; job tenure; inverse gaussian; wage-tenure profiles; option theory; Betriebszugeh\"{o}rigkeit; Lohn; Erwerbsverlauf; Verhandlungstheorie; Realoption},
language = {eng},
number = {1688},
title = {Tenure profiles and efficient separation in a stochastic productivity model},
type = {CESifo working papers},
url = {http://hdl.handle.net/10419/19152},
year = {2006}
}
