Differences in Wage Growth by Education Level: Do Less Educated Workers Gain Less from Work Experience?

This paper revisits the old question of whether wage growth differs by education level. The paper makes both a methodological and a substantive contribution by offering a new strategy for separately identifying returns to tenure, experience, and job match. Our empirical results, based on the Survey of Income and Program Participation, show that overall wage growth is higher for more-educated workers. This reflects higher returns to both tenure and job match for more-educated females. College-educated males also have larger increases in the job match component, but their high within-job wage growth largely reflects higher returns to experience than less-educated workers.