Wage Differences between Incumbents and External Candidates
This paper compares the hourly wage of employees who change jobs within their firm with that of workers who are hired from other employers in the external labor market. We use a Dutch data set of about 45 thousand workers who are employed at 1,838 firms over in the years 1997 and 1998. We have the following empirical results: Workers who moved internally are in the higher segments of the wage distribution, relative to externally-hired workers. The difference in wage narrows a bit when we relate the workers with internal mobility to the hirees who were previously employed with another firm (job-to-job movement). We find that the difference in wage between internal candidates and external candidates from other employers disappears if we correct for the workersâ€™ observable characteristics. The empirical results indicate that on average there is no substantial wage difference between workers who make a transition between jobs within their firm and comparable workers who make a transition between firms in the external labor market.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +31 30 253 9800
Fax: +31 30 253 7373
Web page: http://www.uu.nl/EN/faculties/leg/organisation/schools/schoolofeconomicsuse/Pages/default.aspx
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John M. Abowd & Francis Kramarz & David N. Margolis, 1994.
"High-Wage Workers and High-Wage Firms,"
CIRANO Working Papers
- John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High Wage Workers and High Wage Firms," NBER Working Papers 4917, National Bureau of Economic Research, Inc.
- Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Universite de Montreal, Departement de sciences economiques.
- Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 921-55, November.
- Robert Gibbons & Michael Waldman, 1999. "A Theory Of Wage And Promotion Dynamics Inside Firms," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1321-1358, November.
- Edward P. Lazear, 1991. "Labor Economics and the Psychology of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 89-110, Spring.
- Greenwald, Bruce C, 1986. "Adverse Selection in the Labour Market," Review of Economic Studies, Wiley Blackwell, vol. 53(3), pages 325-47, July.
- Simon Burgess & Julia Lane & David Stevens, 1998. "Hiring Risky Workers: Some Evidence," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(4), pages 669-676, December.
- Hassink, Wolter H. J., 1996. "An empirical note on job turnover and internal mobility of workers," Economics Letters, Elsevier, vol. 51(3), pages 339-344, June.
- Treble, John & van Gameren, Edwin & Bridges, Sarah & Barmby, Tim, 2001. "The internal economics of the firm: further evidence from personnel data," Labour Economics, Elsevier, vol. 8(5), pages 531-552, December.
- Chan, William, 1996. "External Recruitment versus Internal Promotion," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 555-70, October.
- Edward P. Lazear, 1995. "Hiring Risky Workers," NBER Working Papers 5334, National Bureau of Economic Research, Inc.
- Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 881-919, November.
When requesting a correction, please mention this item's handle: RePEc:use:tkiwps:0303. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marina Muilwijk)
If references are entirely missing, you can add them using this form.