Does tenure affect earnings?

This paper investigates the relationship between tenure and earnings using two different approaches utilising a matched employer-employee sample. In the first approach a two step procedure is adopted where the tenure status is modelled as endogenous and subject to choice decision. In the second approach the effect of tenure on earnings is estimated by a system of simultaneous equations using three stage least squares. The results suggest the tenure is a significant determinant of earnings.Economics, Labour, Pay, Tenure