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Wage Dynamics and Promotions Inside and Between Firms

Author Info

  • Silva, António Dias da

    ()

    (Tinbergen Institute)

  • van der Klaauw, Bas

    ()

    (VU University Amsterdam)

Abstract

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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Keywords: competition; learning; matched employer-employee data; dynamic panel data models;

Other versions of this item:

Find related papers by JEL classification:
  • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
  • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
  • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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Cited by:

  1. Waldman, Michael, 2007. "Theory and evidence in internal labor markets," MPRA Paper 5113, University Library of Munich, Germany.
  2. C. Sofia Machado & Miguel Portela, 2011. "Age and opportunities for promotion," NIPE Working Papers 03/2011, NIPE - Universidade do Minho.
  3. 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.

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