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Job level changes and wage growth

Author

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  • Vasilios D. Kosteas

Abstract

Purpose - The purpose of this paper is to estimate the impact of job level changes on wages accounting for both the potential endogeneity of promotions and measurement error in job level changes. Design/methodology/approach - Instruments for job level changes the workers' use belief about the possibility of a promotion from the previous period. Reasons why the respondent believes that a promotion is not possible are used as a second set of instruments. Also, the paper estimates separate wage effects for men and women. Findings - The paper indicates that promotions carry a roughly 18 percent wage increase; compared to a 7 percent premium when using ordinary least squares estimation. The paper also finds that men receive much larger wage increases when promoted, compared with women. Originality/value - This is the first paper to account for the endogeneity of promotions in wage estimates. Accurately estimating the relationship between job level changes and wages helps people to understand wage growth over a worker's lifetime.

Suggested Citation

  • Vasilios D. Kosteas, 2009. "Job level changes and wage growth," International Journal of Manpower, Emerald Group Publishing Limited, vol. 30(3), pages 269-284, June.
    • Handle: RePEc:eme:ijmpps:v:30:y:2009:i:3:p:269-284
    DOI: 10.1108/01437720910956763
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    Citations

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    Cited by:

    1. Ali Fakih & Pascal L. Ghazalian, 2013. "Female Labour Force Participation in MENA's Manufacturing Sector: The Implications of Firm-related and National Factors," CIRANO Working Papers 2013s-46, CIRANO.
    2. Ali Fakih, 2014. "Vacation Leave, Work Hours, and Wages: New Evidence from Linked Employer–Employee Data," LABOUR, CEIS, vol. 28(4), pages 376-398, December.
    3. Kizal Imtiaz & Mahnoor Farooq & Maryam Saeed Hashmi & Rahat ul Aain, 2018. "Impact Of Perceived Organizational Support On Job Satisfaction With Mediating Role Of Employee Motivation: Evidence From Pharmaceutical Sector Of Lahore, Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(2), pages 13-26.
    4. van Huizen, Thomas & Alessie, Rob, 2015. "Time preferences and career investments," Labour Economics, Elsevier, vol. 35(C), pages 77-92.
    5. Mohsen Javdani, 2020. "Visible Minorities and Job Mobility: Evidence from a Workplace Panel Survey," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(4), pages 491-524, December.
    6. Kizal Imtiaz & Mahnoor Farooq & Maryam Saeed Hashmi & Rahat ul Aain, 2018. "Impact Of Perceived Organizational Support On Job Satisfaction With Mediating Role Of Employee Motivation: Evidence From Pharmaceutical Sector Of Lahore, Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(2), pages 14-12.
    7. Vasilios D. Kosteas, 2011. "Job Satisfaction and Promotions," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(1), pages 174-194, January.
    8. Ashley Pullman & Britta Gauly & Clemens M. Lechner, 2021. "Short-term earnings mobility in the Canadian and German context: the role of cognitive skills," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-19, December.
    9. Sophie Tripp & Yariv Fadlon, 2020. "Promotions and Race: An Analysis of Wage Returns and Job Satisfaction," LABOUR, CEIS, vol. 34(2), pages 176-190, June.
    10. Javdani, Mohsen, 2019. "Visible Minorities and Job Mobility: Evidence from a Workplace Panel Survey," IZA Discussion Papers 12736, Institute of Labor Economics (IZA).

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