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Wage dynamics and promotions inside and between firms

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  • Bas Klaauw
  • António Dias da Silva

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.
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  • Bas Klaauw & António Dias da Silva, 2011. "Wage dynamics and promotions inside and between firms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1513-1548, October.
    • Handle: RePEc:spr:jopoec:v:24:y:2011:i:4:p:1513-1548
    DOI: 10.1007/s00148-010-0336-6
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    2. 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.
    3. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    4. 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.
    5. Frederiksen, Anders, 2013. "Incentives and earnings growth," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 97-107.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. C. Sofia Machado & Miguel Portela, 2011. "Age and opportunities for promotion," NIPE Working Papers 03/2011, NIPE - Universidade do Minho.
    11. 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.
    12. 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.
    13. 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.
    14. 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.
    15. Kazuaki Okamura, 2011. "The Signalling Role of Promotion in Japan," Discussion Papers 1112, Graduate School of Economics, Kobe University.
    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.

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    More about this item

    Keywords

    Learning; Competition; Matched employer–employee data; M5; J6; L2;
    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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