The missing link? Experience-earnings profiles and earnings fluctuation
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Built upon data from 11 succeeding annual wage surveys carried out between 1992 and 2003 by the National Employment Service in Hungary, the paper uses elementary statistical tools to examine whether or not earnings fluctuations have differed in size among groups of employees with different degrees of schooling and experience, and if they have, whether the observed differentials may be related to differences in the respective experience-earnings profiles of the groups. Findings suggest that earnings fluctuations have differed in size across those groups, and that they appear to have done so in association with group-specific experience-earnings profiles. Assuming that differences in the observed magnitudes of earnings fluctuations are at least partly due to differences in the flexibility/rigidity of the attained market rates of earnings, and that flexibility/rigidity of those rates is a determinant of unemployment, it seems reasonable to suspect that long-discovered systemic differences in unemployment across groups with different degrees of schooling and experience (and, perhaps, across countries as well) may also be related in part to differences in the shapes of their experience-earnings profiles.
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