expensive older workers into retirement. Based on the seniority wage model developed by Lazear (1979), we discuss steep … seniority wage profiles as incentives for firms to dismiss older workers before retirement. Conditional on individual retirement … incentives, e.g., social security wealth or health status, the steepness of the wage profile will have different incentives for …

and the distribution of tenures. We develop a theoretical model based on efficient bargaining, where both log outside wage … and log wage in the current job follow a random walk, as found empirically. This setting allows the application of real … we observe outside wages only at job start and job separation, our empirical analysis of within job wage growth is based …