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Author: Bates, Michael David
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1. Bates, Michael David
Essays on Asymmetric Employer Learning and the Economics of Education
Ph.D. Dissertation, Department of Economics, MIchigan State University, 2015
Cohort(s): NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Armed Forces Qualifications Test (AFQT); Educational Attainment; Labor Force Participation; Learning, Asymmetric; Mobility, Job; Unemployment

Permission to reprint the abstract has not been received from the publisher.

Chapter 2 examines worker mobility, and empirically tests whether all firms learn about workers' abilities at the same rate (symmetric learning) or whether current employers accumulate and use private information about their workers (asymmetric learning). The employer learning model allows for both public and private learning, and thus, nests symmetric learning as a special case. The model predicts that conditional on employees' easily observable reference groups, workers are adversely selected into job switches and layoffs on the basis of difficult to observe characteristics, such as intellectual ability. Inversely, conditional on ability, the model predicts that as the mean ability of a worker's reference group increases, the likelihood of job separation increases. Under asymmetric private learning, these effects should become more pronounced over the length of continuous working spells. The same effects should diminish with experience, in the presence of public learning. In keeping with earlier examinations of employer learning hypotheses, this study examines evidence from the 1979 cohort of the National Longitudinal Survey of Youth, using AFQT as the difficult to observe measure of ability. Conditional on AFQT score, workers with higher education from more selective institutions are are positively selected into job switches and moves from employment to unemployment during recessions. The dynamics of these effects largely play out as predicted. While this works presents evidence adverse selection on the basis of AFQT, for job-to-unemployment transitions, the same is not true for job-to-job moves. The dynamic effects for AFQT are likewise inconsistent. Accordingly, the evidence largely rejects symmetric learning in favor asymmetric learning.
Bibliography Citation
Bates, Michael David. Essays on Asymmetric Employer Learning and the Economics of Education. Ph.D. Dissertation, Department of Economics, MIchigan State University, 2015.