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Seniority in Germany: New Evidence on Returns to Tenure for Male Full-time Workers

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  • Robert Orlowski
  • Regina T. Riphahn

Abstract

This study uses recent data taken from the German Socioeconomic Panel (2002-2006) to evaluate the extent of and heterogeneity in returns to tenure for men in East and West Germany, employed in both the private and the public sector. We find significantly different wage patterns in East- and West Germany as well as between the private and public sector. Independent of the particular subsample, the application of the Altonji-Shakotko estimation approach yields minute and insignificant returns to tenure and more substantial returns to experience. The profile of the East German wage structure is surprisingly flat: after the first ten years of experience - and in contrast to the situation in West Germany - there appear to be no returns to additional general human capital.

Suggested Citation

  • Robert Orlowski & Regina T. Riphahn, 2007. "Seniority in Germany: New Evidence on Returns to Tenure for Male Full-time Workers," Working Papers 036, Bavarian Graduate Program in Economics (BGPE).
    • Handle: RePEc:bav:wpaper:036_orlowski_riphahn
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    Cited by:

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    3. Gregor Jarosch, 2023. "Searching for Job Security and the Consequences of Job Loss," Econometrica, Econometric Society, vol. 91(3), pages 903-942, May.
    4. 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.
    5. Thomas Zwick, 2012. "Consequences of Seniority Wages on the Employment Structure," ILR Review, Cornell University, ILR School, vol. 65(1), pages 108-125, January.

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    More about this item

    Keywords

    returns to tenure; seniority; earnings patterns; private and public sector;
    All these keywords.

    JEL classification:

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

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