Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/34466
Authors: 
Berkhout, Peter
Hartog, Joop
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers 3026
Abstract: 
Firms hiring fresh graduates face uncertainty on the future productivity of workers. Intuitively, one expects starting wages to reflect this. Formal analysis supports the intuition. We use the dispersion of exam grades within a field of education as an indicator of the heterogeneity that employers face. We find solid evidence that starting wages are lower if the variance of exam grades is higher and that starting wages are lower if the skew is higher: employers shift quality risk to new hires, but pay for the opportunity to catch the really good workers.
Subjects: 
Wages
risk
ability
Document Type: 
Working Paper

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