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Does the plant size–wage differential increase with tenure? Affirming evidence from German panel data

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  • Fackler, Daniel
  • Schank, Thorsten
  • Schnabel, Claus

Abstract

We show that the major part of the plant size–wage premium in Germany is reflected in different wage growth patterns in plants of different size. This is consistent with the hypothesis that large firms ‘produce’ more skilled workers over time.

Suggested Citation

  • Fackler, Daniel & Schank, Thorsten & Schnabel, Claus, 2015. "Does the plant size–wage differential increase with tenure? Affirming evidence from German panel data," Economics Letters, Elsevier, vol. 135(C), pages 9-11.
    • Handle: RePEc:eee:ecolet:v:135:y:2015:i:c:p:9-11
    DOI: 10.1016/j.econlet.2015.07.023
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    References listed on IDEAS

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    1. Zwick, Thomas, 2011. "Seniority wages and establishment characteristics," Labour Economics, Elsevier, vol. 18(6), pages 853-861.
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    7. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    8. Kenneth R. Troske, 1999. "Evidence On The Employer Size-Wage Premium From Worker-Establishment Matched Data," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 15-26, February.
    9. 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].
    10. Orlowski, Robert & Riphahn, Regina T., 2008. "Seniority in Germany: New evidence on returns to tenure for male full-time workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 139-155.
    11. Orlowski, Robert & Riphahn, Regina T., 2008. "Seniority in Germany: New evidence on returns to tenure for male full-time workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 139-155.
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    13. Dan A. Black & Brett J. Noel & Zheng Wang, 1999. "On-the-Job Training, Establishment Size, and Firm Size: Evidence for Economies of Scale in the Production of Human Capital," Southern Economic Journal, John Wiley & Sons, vol. 66(1), pages 82-100, July.
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    Cited by:

    1. Fackler, Daniel & Hank, Eva, 2016. "Who buffers income losses after job displacement? The role of alternative income sources, the family, and the state," IWH Discussion Papers 28/2016, Halle Institute for Economic Research (IWH).
    2. Bossler, Mario & Kubis, Alexander & Moczall, Andreas, 2017. "Neueinstellungen im Jahr 2016: Große Betriebe haben im Wettbewerb um Fachkräfte oft die Nase vorn (Recruitments in the year 2016 : Large employers get to take their pick)," IAB-Kurzbericht 201718, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Mario Bossler & Gregor Geis & Jens Stegmaier, 2018. "Comparing survey data with an official administrative population: assessing sample-selectivity in the IAB Establishment Panel," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(2), pages 899-920, March.
    4. Daniel Fackler & Eva Hank, 2016. "Who Buffers Income Losses after Job Displacement? The Role of Alternative Income Sources, the Family, and the State," SOEPpapers on Multidisciplinary Panel Data Research 863, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Arellano-Bover, Jaime, 2020. "Career Consequences of Firm Heterogeneity for Young Workers: First Job and Firm Size," IZA Discussion Papers 12969, Institute of Labor Economics (IZA).
    6. Hank, Eva & Fackler, Daniel, 2017. "Who buffers income losses after job displacement? The role of alternative income sources, the family, and the state," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168098, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Plant size–wage differential; Seniority wages; Linked employer–employee data;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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