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The Employment Consequences of Seniority Wages

  • Zwick, Thomas

This paper combines two strains of the literature on the employment effects of deferred compensation. The first strain separates seniority and job matching wage effects on the basis of individual data, but cannot look at employment consequences. The second strain explains the employment structure on the basis of establishment data, but cannot properly calculate seniority wages. This paper uses linked employeremployee data, aggregates individual seniority wages to the establishment level, and correlates them with the establishment employment structure. According to the deferred compensation hypothesis this paper finds that establishments with stronger seniority wages have a higher tenure but hire less older employees.

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File URL: http://econstor.eu/bitstream/10419/24734/1/dp08039.pdf
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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-039.

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7311
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  1. Lorne Carmichael, 1981. "Firm-Specific Human Capital and Promotion Ladders," Working Papers 452, Queen's University, Department of Economics.
  2. Hutchens, Robert M, 1987. "A Test of Lazear's Theory of Delayed Payment Contracts," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages S153-70, October.
  3. Katharine G. Abraham & Henry S. Farber, 1986. "Job Duration, Seniority and Earnings," Working papers 407, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Edward P. Lazear, 1999. "Personnel Economics: Past Lessons and Future Directions," NBER Working Papers 6957, National Bureau of Economic Research, Inc.
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