The relationship between firm specific capital and the life-time earning

There is an outgoing debate in labor economics over the existence of a relationship between firm-specific skills of the individuals and their life-time incomes. The vast amount of studies in the literature which has analyzed the relationship between continuity in working in the same firm and the change in wages, the focus has been specifically given to the return to tenure as it is seen one of the firm-specific components of the wages. In this context, the subject matter of this thesis is to investigate the relationship between the firm-specific skills of the employees and their life-time incomes along with their overall experiences in the labor market. As a result of using pooled cross section for the years 2004-2015 by using TURKSTAT Household Labor Force Survey Micro Data, the estimated return to 10 years of job tenure raise the wage of low-educated workers by 2.6%, high school graduates by 7% and university graduates 11.8%. Using the Multinomial Logit Model and Difference in Differences methods by using the Income and Living Conditions Survey Panel Data for the years 2012- 2015, the decisions of the sector, occupation and job change of the workers and their effects on wages were investigated. After analyzing how wage change, decrease in working hours, transition to formal sector, health status, education affected these decisions, it was seen that especially sector switch brought wage increase. It is concluded that for those who have succeeded in carrying out the human capital or experience in other sectors gain sector pay.