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Seniority and Job Stability: A Quantile Regression Approach Using Matched Employer-Employee Data

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Boockmann, Bernhard
Steffes, Susanne

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Abstract

Job mobility and employment durations can be explained by different theoretical approaches, such as job matching or human capital theory or dual labor market approaches. These models may, however, apply to different degrees at different durations in the employment spell. Standard empirical techniques, such as hazard rate analysis, cannot deal with this problem. In this paper, we apply censored quantile regression techniques to estimate employment durations of male workers in Germany. Our results give some support to the job matching model: individuals with a high risk of being bad matches exhibit higher exit rates initially, but the effect fades out over time. By contrast, the influence of human capital variables such as education and further training decreases with employment duration, which is inconsistent with the notion of increasing match-specific rents due to human capital accumulation. The results also suggest that the effects of certain labor market institutions, such as works councils, differ markedly between short-term and long-term employment, supporting the view that institutions give rise to dual labor markets.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 07-014.

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Date of creation: 2007
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Handle: RePEc:zbw:zewdip:5502

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Related research
Keywords: Job Durations Mobility Matching Human Capital Quantile Regression

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Find related papers by JEL classification:
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

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  1. Alison L. Booth & Marco Francesconi & Carlos Garcia-Serrano, 1999. "Job tenure and job mobility in Britain," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 53(1), pages 43-70, October.
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  3. Gerlach, Knut & Stephan, Gesine, 2005. "Individual tenure and collective contracts," IAB Discussion Paper 200510, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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  5. Bilias, Yannis & Chen, Songnian & Ying, Zhiliang, 2000. "Simple resampling methods for censored regression quantiles," Journal of Econometrics, Elsevier, vol. 99(2), pages 373-386, December. [Downloadable!] (restricted)
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  10. Joel Horowitz & George Neumann, 1987. "Semiparametric estimation of employment duration models," Econometric Reviews, Taylor and Francis Journals, vol. 6(1), pages 5-40. [Downloadable!] (restricted)
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  12. Daniel HcFadden, 1987. "Semi parametric estimation of employment duration models," Econometric Reviews, Taylor and Francis Journals, vol. 6(2), pages 257-270. [Downloadable!] (restricted)
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  14. Kugler, Adriana D. & Pica, Giovanni, 2004. "Effects of Employment Protection and Product Market Regulations on the Italian Labour Market," CEPR Discussion Papers 4216, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  15. Peter Cappelli & David Neumark, 2001. "External Job Churning and Internal Job Flexibility," NBER Working Papers 8111, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Fitzenberger, Bernd & Winker, Peter, . "Improving the Computation of Censored Quantile Regressions," IVS discussion paper series 568, Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim. [Downloadable!]
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  17. Alda, Holger & Bender, Stefan & Gartner, Hermann, 2005. "The linked employer-employee dataset of the IAB (LIAB)," IAB Discussion Paper 200506, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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  19. Bernd Fitzenberger & Ralf Wilke, 2006. "Using quantile regression for duration analysis," AStA Advances in Statistical Analysis, Springer, vol. 90(1), pages 105-120, March. [Downloadable!] (restricted)
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  20. Johnson, William R, 1978. "A Theory of Job Shopping," The Quarterly Journal of Economics, MIT Press, vol. 92(2), pages 261-78, May. [Downloadable!] (restricted)
  21. Karen Mumford & Peter N. Smith, 2004. "Job Tenure in Britain: Employee Characteristics versus Workplace Effects," Economica, London School of Economics and Political Science, vol. 71(281), pages 275-297, 05. [Downloadable!] (restricted)
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  22. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October. [Downloadable!] (restricted)
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  23. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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  26. Farber, Henry S, 1994. "The Analysis of Interfirm Worker Mobility," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 554-93, October. [Downloadable!] (restricted)
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