The Determinants of Employee Productivity and Earnings: Some New Evidence

Harry J. Holzer

NBER Working Paper No. 2782
Issued in December 1988
NBER Program(s):   LS

This paper uses data from a nationwide sample of firms on employee wages and characteristics to reexamine the determinants of employee productivity and earnings. The data include several measures of job experience, training, and both worker and firm characteristics as well as subjective employer productivity ratings and earnings of workers. Given observations on the same individual at different points in time, we can consider both levels and changes in earnings and productivity, with various firm- and job-specific effects eliminated from the latter. The results show that: 1) Both previous experience and tenure in the current job have significant, positive effects on wages and productivity. Previous experience effects are found primarily on levels of wages and productivity while tenure affects occur for both current levels and changes. 2) Hours of training are positively related to productivity and wage growth but generally not to levels of either. 3) Among demographic characteristics, we find productivity growth and current productivity levels to be slightly higher for females while their wages are significantly lower. Other determinants of earnings and productivity ratings (e.g., such as various types of incentive pay and the fraction unionized) are considered here as well.

download in pdf format
   (276 K)

download in djvu format
   (172 K)

email paper

This paper is available as PDF (276 K) or DjVu (172 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2782

Published: Published as "The Determinants of Employee Productivity and Earnings", IR, Vol. 29, no. 3 (1990): 403-422.

Users who downloaded this paper also downloaded these:
Bartel w3893 Productivity Gains From the Implementation of Employee Training Programs
Brown w0353 Estimating the Determinants of Employee Performance
Dean and Kunze Productivity Measurement in Service Industries
Bishop The Impact of Previous Training on Productivity and Wages
Helper and Kleiner w13015 International Differences in Lean Production, Productivity and Employee Attitudes
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us