substantial progress in education. However, average workers¿ earnings have stagnated and earnings for workers with more schooling … have declined, compressing the earnings distribution and lowering the returns to education. This paper hypothesizes that … for educated workers. The paper decomposes worker earnings into observable and unobservable firm and individual worker …

capital investment by crucially investigating whether there is a link between tenure and wages - this has come to be an … reasonably strong link between wages and tenure, allowing us to infer that a value can be ascribed to the continuation of …

, are the first to leave the firm (Last In, First Out; LIFO). Second, workers' wages rise with seniority (= a worker …'s tenure relative to the tenure of her colleagues). We seek to explain these regularities by developing a dynamic model of the … to seniority in wages. Efficiency in hiring requires the workers' bargaining power to be in line with their share in the …