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Returns to Type or Tenure?

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  • Amann, R.
  • Klein, T.J.

    (Tilburg University, School of Economics and Management)

Abstract

We analyze the joint determination of wage levels, wage growth and firm tenure. Our analysis is built on estimating a reduced form for tenure, a structural wage level equation and a structural wage growth equation. We disentangle returns to a latent type variable from estimates of general returns to tenure and wage gains from job changes. This type is related to unobservable match quality that is allowed to vary over time and to be correlated with the returns to tenure. The obtained results for Germany indicate that the type plays a crucial role in the remuneration of employees. Those types who change jobs more often obtain steeper wage profiles but earn less on average.
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  • Amann, R. & Klein, T.J., 2011. "Returns to Type or Tenure?," Other publications TiSEM 2bbdd8bc-f35b-49fa-a430-c, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:2bbdd8bc-f35b-49fa-a430-c8c3bf5574cc
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    Cited by:

    1. Laura Hospido, 2009. "Job changes and individual-job specific wage dynamics," Working Papers 0907, Banco de España.
    2. Leth-Petersen, Søren & Lee, Minjoon & Caplin, Andrew & Shapiro, Matthew D. & Sæverud, Johan, 2022. "How Worker Productivity and Wages Grow with Tenure and Experience: The Firm Perspective," CEPR Discussion Papers 17545, C.E.P.R. Discussion Papers.
    3. Orlowski, Robert & Riphahn, Regina T., 2008. "Seniority in Germany: New evidence on returns to tenure for male full-time workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 139-155.
    4. Huy Le-Quang & Ehsan Vallizadeh, 2022. "The returns to school-quality-adjusted education of immigrants in Germany," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 56(1), pages 1-15, December.
    5. Orlowski, Robert & Riphahn, Regina T., 2008. "Seniority in Germany: New evidence on returns to tenure for male full-time workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 139-155.

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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