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Wage Dynamics and Promotions inside and between Firms

Author

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  • Antonio Dias da Silva

    (Vrije Universiteit Amsterdam)

  • Bas van der Klaauw

    (Vrije Universiteit Amsterdam)

Abstract

This discussion paper resulted in a publication in the 'Journal of Population Economics' , 2011, 24, 1513-1548. 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.

Suggested Citation

  • Antonio Dias da Silva & Bas van der Klaauw, 2006. "Wage Dynamics and Promotions inside and between Firms," Tinbergen Institute Discussion Papers 06-084/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20060084
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    References listed on IDEAS

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    1. Ingrid Huitfeldt & Andreas R. Kostøl & Jan Nimczik & Andrea Weber, 2021. "Internal labor markets. A worker flow approach," Discussion Papers 961, Statistics Norway, Research Department.
    2. Alfredo Marvao Pereira & Rui Manuel Pereira, 2008. "Controlling the public wage bill in Portugal: the case of university professors," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 997-1000.
    3. Antti Kauhanen & Sami Napari, 2012. "Career and Wage Dynamics: Evidence from Linked Employer-Employee Data," Research in Labor Economics, in: Research in Labor Economics, pages 35-76, Emerald Group Publishing Limited.
    4. Dato, Simon & Grunewald, Andreas & Kräkel, Matthias & Müller, Daniel, 2016. "Asymmetric employer information, promotions, and the wage policy of firms," Games and Economic Behavior, Elsevier, vol. 100(C), pages 273-300.
    5. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    6. Sung‐Hee Jeon & Jungwee Park & Dafna Kohen, 2023. "Childhood‐onset disabilities and lifetime earnings growth: A longitudinal analysis," Health Economics, John Wiley & Sons, Ltd., vol. 32(8), pages 1749-1766, August.
    7. 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.
    8. Kazuaki Okamura, 2011. "The Signalling Role of Promotion in Japan," Discussion Papers 1112, Graduate School of Economics, Kobe University.
    9. Huitfeldt, Ingrid & Kostøl, Andreas R. & Nimczik, Jan & Weber, Andrea, 2023. "Internal labor markets: A worker flow approach," Journal of Econometrics, Elsevier, vol. 233(2), pages 661-688.
    10. Wiljan van den Berge & Arne Brouwers, 2017. "A lost generation? The early career effects of graduating during a recession," CPB Discussion Paper 356, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Cassidy, Hugh & DeVaro, Jed & Kauhanen, Antti, 2016. "Promotion signaling, gender, and turnover: New theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 140-166.
    12. C. Sofia Machado & Miguel Portela, 2011. "Age and opportunities for promotion," NIPE Working Papers 03/2011, NIPE - Universidade do Minho.
    13. Francesca Sgobbi & Fátima Suleman, 2015. "The Value of Transferable Skills," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(4), pages 378-399, September.
    14. Frederiksen, Anders, 2013. "Incentives and earnings growth," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 97-107.
    15. Wiljan van den Berge & Arne Brouwers, 2017. "A lost generation? The early career effects of graduating during a recession," CPB Discussion Paper 356.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    16. Chadi, Adrian & Goerke, Laszlo, 2018. "Missing at work – Sickness-related absence and subsequent career events," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 153-176.
    17. Chiara Mussida & Luca Zanin, 2020. "I found a better job opportunity! Voluntary job mobility of employees and temporary contracts before and after the great recession in France, Italy and Spain," Empirical Economics, Springer, vol. 59(1), pages 47-98, July.

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    More about this item

    Keywords

    learning; competition; dynamic panel data models; matched employer-employee data;
    All these keywords.

    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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