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calculate labor market experience in the following manner. A student is assumed to enter
the labor force at the beginning of the calendar year that immediately follows the last year
that he was enrolled in school. At the beginning of that year he has no experience, and
experience accumulates each year by the annual weeks worked. We impute experience for
missing years by taking the average of the number of weeks worked in the year immediately
proceeding the missing year and in the year immediately following it.
One potentially difficult issue is precisely defining the time of entry into the labor force.
We wish to define entry to be the date at which an individual leaves school and enters the
labor force. To approximate this we use calendar years as our unit of time and assume
that an individual begins his working life with zero experience and then begins the next
year with a level of experience equal to the weeks worked in that calendar year. We have
extensively explored the sensitivity of our main results to these assumptions and find that
our results are very robust. This robustness comes in part from two aspects of our sample
design. First, we do not include anyone who completes a year of post-secondary education.
While a substantial number of high school graduates return to college after working in the
labor force for some time, these people are not included in our data. Second, individuals
who drop out of school and later receive a General Equivalency Degree (GED) are treated
as dropouts. This assumption is justified by Cameron and Heckman (1993) who show that
the earnings of GEDs is closer to dropouts than to high school graduates. However, the few
students who drop out, complete a GED, and then attend college are not included in the
sample. Thus, the only group of students who will be problematic are those who drop out
of high school and return to conventional high school to complete a grade or get a standard
high school diploma, but do not move on to college. Very few individuals have this pattern
of schooling: only about 7% of high school non-completers and 1% of eventual high school
graduates leave school for over a year and then return.
We use the NLSY work history data to compute job turnover for this sample. We
compute the number of jobs an individual leaves voluntarily, and the number he leaves
involuntarily, for each year he is in the sample. Voluntary job separations are defined as
leaving a job for any reason other than being fired, laid off, or a business closing. We
also distinguish job separations by whether they are followed by an unemployment spell of
three or more weeks. We are interested in the impact of job separations on wage growth,
4
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"ocrText": "JUL-03-2000 12:14\nOMB DEP DIR MGMT\n202\n395\n6974\nP.08/37\ncalculate labor market experience in the following manner. A student is assumed to enter\nthe labor force at the beginning of the calendar year that immediately follows the last year\nthat he was enrolled in school. At the beginning of that year he has no experience, and\nexperience accumulates each year by the annual weeks worked. We impute experience for\nmissing years by taking the average of the number of weeks worked in the year immediately\nproceeding the missing year and in the year immediately following it.\nOne potentially difficult issue is precisely defining the time of entry into the labor force.\nWe wish to define entry to be the date at which an individual leaves school and enters the\nlabor force. To approximate this we use calendar years as our unit of time and assume\nthat an individual begins his working life with zero experience and then begins the next\nyear with a level of experience equal to the weeks worked in that calendar year. We have\nextensively explored the sensitivity of our main results to these assumptions and find that\nour results are very robust. This robustness comes in part from two aspects of our sample\ndesign. First, we do not include anyone who completes a year of post-secondary education.\nWhile a substantial number of high school graduates return to college after working in the\nlabor force for some time, these people are not included in our data. Second, individuals\nwho drop out of school and later receive a General Equivalency Degree (GED) are treated\nas dropouts. This assumption is justified by Cameron and Heckman (1993) who show that\nthe earnings of GEDs is closer to dropouts than to high school graduates. However, the few\nstudents who drop out, complete a GED, and then attend college are not included in the\nsample. Thus, the only group of students who will be problematic are those who drop out\nof high school and return to conventional high school to complete a grade or get a standard\nhigh school diploma, but do not move on to college. Very few individuals have this pattern\nof schooling: only about 7% of high school non-completers and 1% of eventual high school\ngraduates leave school for over a year and then return.\nWe use the NLSY work history data to compute job turnover for this sample. We\ncompute the number of jobs an individual leaves voluntarily, and the number he leaves\ninvoluntarily, for each year he is in the sample. Voluntary job separations are defined as\nleaving a job for any reason other than being fired, laid off, or a business closing. We\nalso distinguish job separations by whether they are followed by an unemployment spell of\nthree or more weeks. We are interested in the impact of job separations on wage growth,\n4"
}