Elliott Weder (Erasmus University Rotterdam)
Using population-wide administrative data from the Netherlands, I examine how labour market entry and returns to experience changed across cohorts over the past quarter-century. I show that labour market entry declined and starting pay stagnated, yet the returns to labour market experience increased. Firms played a central role in these changes: hiring rates declined, and the experience premium increased within firms, rather than through changes in mobility or worker composition. I propose intangible capital deepening as a unifying explanation: firm-level investment spikes are associated with reduced hiring of entry-level workers, while the entry-level workers who are hired experience faster earnings growth. I demonstrate that alternative explanations cannot account for the divergence between entry conditions and post-entry outcomes.