Many papers have shown that U.S. earnings inequalityincreased substantially from about 1980 to around 1996.1Recent and careful studies agree that a basic explanationfor increased earnings inequality is the rising returns tohuman capital resulting from new technology. These risingreturns have...

The career prospects of newly recruited employees differ substantially within an organization.The stars experience a considerable growth in earnings; others can hardly maintain theirentry salaries. This article sheds light on the mechanisms generating the observedheterogeneity in earnings...