Relationship Between Return to Experience and Initial Wage Level in United States

This paper estimates the relationship between return to experience and ini- tial wage on the basic of the latest dataset NLSY97 in the United States. In general, we will observe the relationship between return to experience and ed- ucational level is positive, while the relationship between return to experience and other unobservable individual abilities is negative when conditioning on educational attainment. In this case, I will divide the sample into four educa- tional groups and three ethnic groups. For each of these subgroups, I will use a linear model to estimate the relationship between initial wages and future wage growth. Also, I link my findings into some related theories to explain the negative relationship.