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The Role of Comparative Advantage and Learning in Wage Dynamics and Intrafirm Mobility: Evidence from Germany

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  • Stephanie Lluis

    (University of Minnesota)

Abstract

This article measures the importance of job level assignment based on comparative advantage and learning about workers' ability in explaining intrafirm wage and mobility dynamics using survey data from the German Socio-Economic Panel. The results reveal the importance of nonrandom selection of workers into the rungs of the firm's job ladder. Measured and unmeasured ability play important roles in workers' rank assignment, with unmeasured ability being more important at higher levels of the hierarchical job structure. There is some evidence of learning effects for workers below age 35 generating mobility between upper and executive levels.

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  • Stephanie Lluis, 2005. "The Role of Comparative Advantage and Learning in Wage Dynamics and Intrafirm Mobility: Evidence from Germany," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 725-768, October.
  • Handle: RePEc:ucp:jlabec:v:23:y:2005:i:4:p:725-768
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    Cited by:

    1. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics," Introductory Chapters,in: Robert Gibbons & John Roberts (ed.), The Handbook of Organizational Economics Princeton University Press.
    2. Dohmen, Thomas J., 2004. "Performance, seniority, and wages: formal salary systems and individual earnings profiles," Labour Economics, Elsevier, vol. 11(6), pages 741-763, December.
    3. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, January.
    4. Langinier, Corinne & Lluis, Stéphanie, 2015. "Departure and Promotion of U.S. Patent Examiners: Do Patent Characteristics Matter?," Working Papers 2015-18, University of Alberta, Department of Economics.
    5. Robert Gibbons & Michael Waldman, 2006. "Enriching a Theory of Wage and Promotion Dynamics inside Firms," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 59-108, January.
    6. Michael Waldman, 2012. "Theory and Evidence in Internal Labor Markets," Introductory Chapters,in: Robert Gibbons & John Roberts (ed.), The Handbook of Organizational Economics Princeton University Press.
    7. Nakabayashi, Masaki, 2011. "Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s," MPRA Paper 30597, University Library of Munich, Germany.
    8. Delfgaauw, Josse, 2007. "The effect of job satisfaction on job search: Not just whether, but also where," Labour Economics, Elsevier, vol. 14(3), pages 299-317, June.
    9. Adrian Chadi & Laszlo Goerke, 2015. "Missing at Work – Sickness-related Absence and Subsequent Job Mobility," IAAEU Discussion Papers 201504, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    10. repec:bla:indres:v:56:y:2017:i:3:p:393-410 is not listed on IDEAS
    11. Anders Frederiksen & Timothy Halliday & Alexander K. Koch, 2016. "Within- and Cross-Firm Mobility and Earnings Growth," ILR Review, Cornell University, ILR School, vol. 69(2), pages 320-353, March.
    12. Stéphanie Lluis & Jean Abraham, 2013. "The Wage–Health Insurance Trade-off and Worker Selection: Evidence From the Medical Expenditure Panel Survey 1997 to 2006," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(2), pages 541-581, April.
    13. Dora Gicheva, 2013. "Working Long Hours and Early Career Outcomes in the High-End Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 31(4), pages 785-824.
    14. Robert Gibbons & Lawrence F. Katz & Thomas Lemieux & Daniel Parent, 2005. "Comparative Advantage, Learning, and Sectoral Wage Determination," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 681-724, October.
    15. Jin, Xin, 2014. "The Signaling Role of Note Being Promoted: Theory and Evidence," MPRA Paper 58484, University Library of Munich, Germany.
    16. Xin Jin, 2014. "The Signaling Role of Not Being Promoted: Theory and Evidence," Working Papers 0314, University of South Florida, Department of Economics.
    17. Ana Ferrer & Stéphanie Lluis, 2008. "Should Workers Care about Firm Size?," ILR Review, Cornell University, ILR School, vol. 62(1), pages 104-125, October.
    18. Bas Klaauw & António Dias da Silva, 2011. "Wage dynamics and promotions inside and between firms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1513-1548, October.
    19. NAKABAYASHI, Masaki, 2011. "Acquired Skills and Learned Abilities: Wage Dynamics of Blue-collar Workers in Internal Labor Markets," ISS Discussion Paper Series (series F) f153, Institute of Social Science, The University of Tokyo, revised Apr 2012.
    20. Valerie Smeets & Michael Waldman & Frederic Warzynski, 2013. "Performance, Career Dynamics, and Span of Control," Economics Working Papers 2013-02, Department of Economics and Business Economics, Aarhus University.
    21. ZHANGALIYEVA, Aigerim & NAKABAYASHI, Masaki, 2013. "Legacy of Czar: The Russian Dual System of Schooling and Signaling," ISS Discussion Paper Series (series F) f163, Institute of Social Science, The University of Tokyo, revised 16 Feb 2018.

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