Earnings, Occupations and Labour Market Experience in Australia; 1997-2005

Abstract

This paper examines the relative importance of different types of labour market experience in the determination of earnings across occupations. Specifically, the paper estimates the returns to general experience, firm tenure and occupational tenure for each occupation within the Australian Standard Classification of Occupations (ASCO) in 1997 and 2005. The paper finds that there is an important role for each form of labour market experience. General experience tends to dominate the other forms of labour market experience, both statistically and numerically. While not as important as general experience, wages nevertheless rise with firm tenure in most occupations. Occupational tenure is only important in a small subset of occupations, mainly for Professionals and Tradespeople. There is also evidence that the return to occupational tenure increased significantly for Tradespeople and for Intermediate Transport and Production Workers between 1997 and 2005.