Medoff, James L., and Katharine G. Abraham. 1981. "Are Those Paid More Really More Productive? The Case of Experience." Journal of Human Resources 16(2):186-216.

This study uses computerized personnel microdata on the white male managerial and professional employees at a major U.S. corporation to address the following question: Can the additional earnings which are associated with more labor market experience at a point in time really be explained by higher productivity at the same point in time? Our answer to this question, based on both cross-sectional and longitudinal information, is that performance plays a substantially smaller role in explaining cross-sectional experience-earnings differentials and earnings growth than is claimed by those who have adopted the human capital explanation of the experience-earnings profile. This response depends critically on our assumption that the performance ratings which supervisors give to their white male managerial and professional subordinates adequately reflect the subordinates' relative productivity in the year of assessment; we present a great deal of evidence which strongly supports
this assumption.

Medoff is affiliated with the Department of Economics, Harvard University, and the National Bureau of Economic Research; Abraham is affiliated with the Sloan School of Management, Massachusetts Institute of Technology, and the National Bureau of Economic Research.
* We are extremely grateful to Charles Brown, Gary Chamberlain, and Zvi Griliches for their econometric advice and to Martin Van Denburgh for his care and efficiency in doing the programming required for this study. The project has been supported by the National Bureau of Economic Research under its program in labor economics. Any opinions expressed are those of the authors and not those of the National Bureau.

© 2003 by the Board of Regents of the University of Wisconsin System

US ISSN 0022-166X

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