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Which Ladder to Climb? Wages of workers by job, plant, and education

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  • Bayer, Christian
  • Kuhn, Moritz

Abstract

Wages grow but also become more unequal as workers age. Using German administrative data, we largely attribute both life-cycle facts to one driving force: some workers progress in hierarchy to jobs with more responsibility, complexity, and independence. In short, they climb the career ladder. Climbing the career ladder explains 50% of wage growth and virtually all of rising wage dispersion. The increasing gender wage gap by age parallels a rising hierarchy gap. Our findings suggest that wage dynamics are shaped by the organization of production, which itself likely depends on technology, the skill set of the workforce, and labor market institutions.

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  • Bayer, Christian & Kuhn, Moritz, 2018. "Which Ladder to Climb? Wages of workers by job, plant, and education," CEPR Discussion Papers 13158, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13158
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    Cited by:

    1. Leena Rudanko, 2019. "Firm Wages in a Frictional Labor Market," 2019 Meeting Papers 358, Society for Economic Dynamics.

    More about this item

    Keywords

    careers; Human Capital; life-cycle wage growth; Wage inequality;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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