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Wage Dynamics and Promotions Inside and Between Firms

  • Silva, António Dias da

    ()

    (European Central Bank)

  • van der Klaauw, Bas

    ()

    (Vrije Universiteit Amsterdam)

We focus on the dynamic relation between wage increases, promotions and job changes. We relate our empirical analyses to the theoretical model of Gibbons and Waldman (1999). In the empirical analyses we use the Portuguese matched employer-employee data Quadros de Pessoal. We conclude from finding significant serial correlation in wage increases and promotion rates that employer learning about the worker's ability might be important. Furthermore, we find that the Portuguese labor market is not competitive. Finally, we argue that employer-reported promotion relate to a large extent to wage increases rather than changes in job tasks and complexity.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2351.

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Length: 33 pages
Date of creation: Oct 2006
Date of revision:
Publication status: published in: Journal of Population Economics, 2011, 24 (4), 1513-1548
Handle: RePEc:iza:izadps:dp2351
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