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Wage Dynamics and Promotions Inside and Between Firms

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  • Silva, António Dias da

    ()
    (Tinbergen Institute)

  • van der Klaauw, Bas

    ()
    (VU University Amsterdam)

Abstract

We focus on the dynamic relation between wage increases, promotions and job changes. We relate our empirical analyses to the theoretical model of Gibbons and Waldman (1999). In the empirical analyses we use the Portuguese matched employer-employee data Quadros de Pessoal. We conclude from finding significant serial correlation in wage increases and promotion rates that employer learning about the worker's ability might be important. Furthermore, we find that the Portuguese labor market is not competitive. Finally, we argue that employer-reported promotion relate to a large extent to wage increases rather than changes in job tasks and complexity.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2351.

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Length: 33 pages
Date of creation: Oct 2006
Date of revision:
Publication status: published in: Journal of Population Economics, 2011, 24 (4), 1513-1548
Handle: RePEc:iza:izadps:dp2351

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Keywords: competition; learning; matched employer-employee data; dynamic panel data models;

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References

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Cited by:
  1. Kazuaki Okamura, 2011. "The Signalling Role of Promotion in Japan," Discussion Papers 1112, Graduate School of Economics, Kobe University.
  2. Machado, C. Sofia & Portela, Miguel, 2013. "Age and Opportunities for Promotion," IZA Discussion Papers 7784, Institute for the Study of Labor (IZA).
  3. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets
    [The Handbook of Organizational Economics]
    ," Introductory Chapters, Princeton University Press.
  4. Frederiksen, Anders & Halliday, Timothy J. & Koch, Alexander K., 2010. "What Do We Work For? An Anatomy of Pre- and Post-Tax Earnings Growth," IZA Discussion Papers 5298, Institute for the Study of Labor (IZA).
  5. Kauhanen, Antti & Napari, Sami, 2011. "Career and Wage Dynamics: Evidence from Linked Employer-Employee Data," Discussion Papers 1244, The Research Institute of the Finnish Economy.
  6. Frederiksen, Anders & Halliday, Timothy J. & Koch, Alexander K., 2010. "Within- and Cross-Firm Mobility and Earnings Growth," IZA Discussion Papers 5163, Institute for the Study of Labor (IZA).

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