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Seniority Rules and Productivity: An Empirical Test

Arthur E. Blakemore and Dennis L. Hoffman
Economica
New Series, Vol. 56, No. 223 (Aug., 1989), pp. 359-371
DOI: 10.2307/2554283
Stable URL: http://www.jstor.org/stable/2554283
Page Count: 13
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Seniority Rules and Productivity: An Empirical Test
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Abstract

The primary purpose of this paper is to test empirically the effect of labour quality on short-run manufacturing productivity. In doing so, the study makes major advances in two areas. For the first time, a job tenure function is estimated, and a time series of job tenure in manufacturing is developed. This estimated tenure series empirically verifies the use of seniority rules in the firm-worker employment relationship. Having generated a tenure series, we then test whether tenure enhances productivity in manufacturing. The results clearly indicate that seniority rules have a statistically significant positive impact on productivity, and the pattern of the seniority rules is reminiscent of a model where human capital has a specific component.

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